What Each Sector Costs — Forward P/E, Right Now
Tech vs. Health Care vs. Communications vs. the rest of the S&P 500, plus the Mag 7
A live comparative-valuation snapshot: the median forward and trailing price-to-earnings multiple for Information Technology, Health Care, and Communication Services members of the S&P 500, against the rest of the index and the Magnificent 7 as a group. Medians of member multiples, not cap-weighted aggregates — so one giant cannot hide what the typical stock costs.
What history says
Editorial commentary written by ALAN analysts. Figures cited below are analyst-authored context — they are not derived from the chart above and may reflect different windows or sources.
The gap between tech's median forward multiple and the rest of the index is the price of expected earnings growth. When that gap stretches far beyond its usual range, growth stocks need increasingly heroic earnings to justify it.
Cap-weighted sector P/Es are dominated by the largest names. The median member tells you what the typical stock in the sector costs — often a very different number.
Forward P/E uses estimated earnings, and estimates are usually revised down as the year progresses. Compare forward against trailing: a big gap means the market is paying for earnings that do not exist yet.
Use the sector gaps as a rebalancing map, not a market-timing signal. If your equity sleeve's sector weights have drifted toward the most expensive groups, harvest the winners back to target — that converts valuation risk into realized gains without a market call.