Seaport: Software Stocks Valuations Compressed, Poised for Rebound

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2026-03-16 23:50:55

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Investing.com – Seaport Chief Stock Strategist Jonathan Golub says software stocks are expected to rebound, and Nvidia (NASDAQ: NVDA), Broadcom (NASDAQ: AVGO), and AMD (NASDAQ: AMD) have upside potential.

Golub wrote in a report that since July, the price-to-earnings multiples of the software and semiconductor sectors have fallen more than 30%. During this period, software stocks declined 25%, while chip stocks rose 15%.

Golub stated, “Investors generally believe that the valuation of the software sector has collapsed, but the semiconductor sector has been spared.” “That is not the case.”

Golub noted that the growth valuations of the three major chip stocks do not match their expected growth rates. Nvidia’s P/E ratio is 21, corresponding to a 66% forward 12-month growth rate; Broadcom’s P/E is 23, corresponding to a 60% growth rate; AMD’s P/E is 25, corresponding to a 62% growth rate. In comparison, the S&P 500’s P/E ratio is 20, corresponding to a 15.5% growth rate.

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