Bubble warnings are getting louder. American tech giants keep surging ahead of the market, with the Nasdaq Composite Index closing a fresh record. But Goldman Sachs has a soothing message.

Sure, tech stocks are worth a lot. At $3.8 trillion, the combined value of Facebook, Amazon, Apple, Microsoft and Google’s parent Alphabet tops the annual gross domestic product of Germany, and all the companies in Japan’s Topix index of stocks.

But other aspects of their advance differ from bubbles past.

Unlike the rush to Nifty Fifty in the 1960s and dot-com frenzy in the late 1990s, the latest rally in the so-called FAAMG stocks has been built more on solid earnings and less on valuation expansion. Over the past decade, the cohort has seen 87 percent of its share gains coming from profits and only 13 percent from increases in price multiples. That compared with 73 percent and 27 percent, respectively for the rest of the market.

As a result, while tech occupies all top five spots in the market for the first time ever, the group’s price-earnings ratio is relatively subdued. At 22.6 times earnings, the FAAMG block fetches a multiple that’s less than half what the then-big five got in the internet bubble years, data compiled by Goldman Sachs showed.

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