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US's Largest Stocks May Be Stretching Their Valuation Multiples Too Thin

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Microsoft (MSFT - Free Report) and Apple (AAPL - Free Report) , the US’s largest publicly traded companies, making up 10% of the S&P 500, reported powerful quarterly results this week. These trillion dollar companies are undoubtedly market moving stocks, yet the markets have traded down roughly 2.5% off its highs last week.

Investors may be beginning to pull profits off the table with the coronavirus seeming to be a good enough catalyst.

The S&P 500 is trading right off its highest forward P/E valuation since the dotcom bubble. The 2019 equity market was primarily driven by a valuation push as investors priced in future growth. If forward guidance doesn’t match expectations, there could be a pullback in the equities, especially those that have seen significant valuation multiple growth.

In this video I will discuss whether AAPL and MSFT have stretched their valuation multiples too far or if these stocks have more growth to be priced in.

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