Schroders Equity Lens August 2026: your go-to guide to global equity markets
Big tech companies are their cheapest for a decade – but are earnings forecasts realistic?
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The August 2026 edition of the Schroders Equity Lens is now available: Schroders Equity Lens
Summary:
- The hyperscaler story has not changed dramatically: revenues strong, capex spend high (slide 5-7)
- But market scepticism has risen: valuations for many big tech companies are at/near cheapest for a decade (slide 8)
- Performance continues to broaden out (slide 9):
- Value > growth
- EM, Japan, UK > US
- In the US: small cap > large cap, Magnificent-7 underperforming
- Earnings expectations continue to be strong, EM exceptionally so (slide 12)
- Despite mega cap cheapening, aggregate valuations remain high in most markets, across most valuation metrics.
- EM stands out as cheap on a forward P/E basis. This hinges on whether sky-high consensus earnings growth forecasts materialise (slide 11)
- Tactical longs for investors who are worried about the risk of stagflation (slide 13):
- value and quality styles, companies with conservative investment strategies, energy equities, defensive sectors.
- gold equities worth considering; careful security selection needed in real estate and IT. For more on this topic see this recent article: Adapting asset allocation to the risk of stagflation
Chart of the month:
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The views and opinions contained herein are those of Schroders’ investment teams and/or Economics Group, and do not necessarily represent Schroder Investment Management North America Inc.’s house views. These views are subject to change. This information is intended to be for information purposes only and it is not intended as promotional material in any respect.
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