Alphabet and Amazon Are Cheaper Than the S&P 500. What's Going On?
The price-to-earnings metric has some oddities associated with it.
Overview
Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Amazon (NASDAQ: AMZN) look cheaper than the S&P 500 (SNPINDEX: ^GSPC) at face value. Right now, Alphabet and Amazon trade for 17 and 20.9 times earnings, respectively. The S&P 500 (SNPINDEX: ^GSPC) trades for 24.2 times earnings, making these two far cheaper than the broader market.
Considering that Alphabet and Amazon are two of the most popular big tech stocks available and both are growing at an incredible pace, this difference seems odd. So, what gives? Are these two actually screaming values begging to be bought, or is there something else going on here? Let's take a look.
Image source: Getty Images.
Details
Source
Originally published at www.fool.com.