- Nvidia has fallen off the screen
- Significantly more US companies this time
The artificial intelligence (AI) revolution has driven the S&P 500 index up by over 7 per cent year to date, while the FTSE 100 is flat over the same time period. This highlights the usual narrative of New World growth vs Old World stagnation, but our growth at a reasonable price (GARP) screen suggests that the domestic market also offers attractive opportunities.
The screen’s key metric is a blended version of the PEG ratio, which we look at alongside the forward ratio. This helps us to consider valuations in the context of growth rates and think about whether investors are paying too much for growth. A PEG ratio under 1 times is generally considered cheap, while one above 1.5 times is pricey.
