Rick Rieder highlights a unique setup: Rising tech profits and falling multiples

BlackRock’s Rick Rieder says a sharp acceleration in forward earnings across major tech groups is changing how investors should view valuations. Over the past three years, consensus forward earnings forecasts climbed about 205% for the “Magnificent Seven” and roughly 149% for the broader tech cohort, while valuation multiples have been moving lower. The combination of much stronger profit growth and falling multiples suggests tech indexes could be repriced on fundamentals rather than frothy multiples, supporting a more constructive outlook for technology-heavy benchmarks like the US Tech 100. The view implies potential upside for tech indices if earnings continue to outpace expectations.