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It’s official, the phrase “it’s only 7 stocks” is dead. 2026’s tape has killed it.
I’m looking at Tesla down 38%, Microsoft down 29%, Meta down 25%, Google down 18%, Amazon and Nvidia both down 17%, and an S&P 500 equal weight that looks like this.
I literally looked at this chart and gasped this afternoon. The participation is incredible.
Today in our prep for What Are Your Thoughts (which was live at 5PM EST), Josh asked me to scan the S&P 500 and list out the household names with 52-week drawdowns greater than 20%.
LOOK AT THESE NAMES.
I’m speculating, but if I showed you this list of names then simultaneously asked you to guess the index’s drawdown, would you say down 2.4%?
I certainly wouldn’t.
But that’s exactly how far we are currently off the high.
And for the pocket of the market that is not participating, mainly Semis, those stocks are getting cheap. Really cheap. So cheap that I produced two charts for your viewing pleasure to address the topic.
First I charted the S&P 500’s sector forward PEs and compared them to the Semis industry group.
*ex-Real Estate on purpose
If Semis were a sector, it would be the fourth cheapest. It would also have the highest expected earnings growth rate over the next 12 months.
“But Matt, it’s an earnings bubble.” I addressed this a few weeks ago (here’s the post).
I also made this chart for you showing the % discount (-) or premium (+) of Semis to the other S&P 500 sectors.
The Semis industry is 22.1% cheaper than the Staples sector. Woah.
Here’s another way to illustrate the same point: Nvidia is up 5,685% since the start of 2019. That’s 70.9% annualized.
But over that entire timeframe the stock has never been as cheap as it is today.
Source: Exhibit A
One of the most important companies in the world with one of the best CEOs in the world with one of the highest growth rates over the next five years in the world is trading at 18.2x its earnings per share forecasts for the next 12 months.
I’m not here to make market calls, but taking the data in its totality, it’s hard to be bearish right now.
That’s all for today. Thank you, as always, for reading. I’ll be back charting for you next week!