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© Reuters.Avoid these two heavily overvalued technology stocks
Investors’ optimism in the technology industry has led to weak fundamentals of ServiceNow (NYSE:) and Zillow Group (NASDAQ:) (Z) and unsustainable valuations. As the market prepares for a possible near-term correction, we think it is best to avoid these overvalued stocks now. continue reading. The technology industry has once again become the focus of attention, as the increase in COVID-19 Delta variant cases has led to the re-implementation of social distancing and lockdown measures in many countries. As a result, the benchmark index, dominated by technology stocks, has risen 3.6% in the past five days, closing Friday’s trading session at a record 14,846.06 points.
As established companies dominate this field, relatively small and weaker technology companies face fierce competition. Therefore, the near-term prospects of many small technology companies look bleak.
Typical examples are ServiceNow, Inc. (NOW) and Zillow Group, Inc. (Z), which appear to be severely overvalued at current price levels, given their weak growth prospects. In addition, since the market is expected to see a rolling correction soon, these two stocks may experience a sharp correction.
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