Twenty-five years after the burst of the dot-com bubble in March 2000, Goldman Sachs says today's technology market is not experiencing a similar speculative surge. Despite recent weakness in tech stocks following a strong run driven by artificial intelligence, the firm argues that sector fundamentals remain solid.

Goldman pointed to more stable valuations and earnings growth among today's tech giants compared to the excessive speculation that characterized early 2000s companies. In a recent investor note, the firm emphasized that a bubble typically involves inflated valuations based on unrealistic revenue expectationssomething it does not see in current market conditions.

The Technology Select Sector SPDR Fund (XLK) and the Vanguard Information Technology Index Fund (VGT) have both seen recent declines. XLK has a one-month return of -4.8%, while VGT is down 6.2%. Over six months, XLK has fallen 5.7%, though VGT gained 4.5%. Over five years, VGT is up 178% and XLK has risen 91.9%, highlighting the long-term strength of the sector.

Goldman maintains its positive view on tech, citing ongoing profit growth as a key reason valuations remain justified despite short-term volatility.