It does kind of make sense for alphabet and meta considering their primary revenue driver is advertising and communication platforms respectively. That would put them into Media & Communications. IT is how they get to that. For amazon it's a bit more complicated, but still it's their retail that drives their revenue where AWS accounts for like ~20% of revenue.. however in amazon's case it's also AWS that also drives more than half of its profit.

It would be interesting (but perhaps useless) to try to weigh the companies by the percentage associated with whatever index or group you're trying to build - e.g, if you're building an IT Index, and AMZN makes 50% of revenues (or profit or however you'd value "that side" of the business) - you'd deweight them by half.

So if by market cap they'd be 8% of the index, you'd have them at 4%, because half of what they do isn't IT but something else (logistics, retail).

good point, i think it'd be valuable to bring in more of these companies to this chart. with it narrowly scoped here it's perhaps (likely) not telling the full story. i would imagine theres plenty of ballooned valuations still because of AI

They're both advertising companies. IT is just the medium by which they do said advertising.

The definition is the first sentence of the post:

> The chart below compares the forward P/E ratios for the S&P 500 and the S&P 500 Information Technology sector.

> Tech valuations have compressed from 40x to 20x, and we are back at levels last seen before the AI boom began

Forward PE is the ratio of stock price to anticipated earnings.

If it's higher, then investors are predicting future growth in a company.

The post defines it clearly: S&P 500 Information Technology sector. That excludes Meta, Alphabet, Amazon – which were moved to Communications and Consumer Discretionary. So the “tech” we’re looking at is more traditional software and hardware (Apple, Microsoft, Nvidia, etc.).

> average non technical people hate AI and would rather not to interact with

So nobody asks ChatGPT for recipes any more and they're all back to Google search? What is this claim based on? Pretty much everyone I know who is non-technical uses AI for a variety of things.

From my limited viewpoint working for an S&P 500 tech company our uptake of AI is very much still on the increase. Every day we do more with AI than the previous day. We are still learning about where to use this but I think the consensus is that it can do a lot.

In the meanwhile my big bad corp measures AI usage as a performance KPI

I see more and more non-tech people using LLMs.

I think none of them are paying for it beyond techies, but this is definitely not because they hate AI.

> average non technical people hate AI

This sounds like an alternate reality.

> average non technical people hate AI

No they don't. It's somewhat polarizing, and quite a lot of non-tech people love it.

> I even noticed now companies are back to ~2022 time in hiring either FT or consultation, from my experience.

You think hiring has surpassed the layoffs? At what wages?

Surely we'll never see the 2020-2022 highs again?

It’s sitting at ~29 forward/trailing p/e which means that it’s likely to drop 30% if there’s a correction and even more if there’s a broader economic thing going on that causes ad spend to go down.

And AMD and Nvidia.