NASDAQ / GDP Ratio — Tech Valuation vs Economy
Track the NASDAQ Composite to GDP ratio. When tech valuations disconnect from economic output, it signals speculative excess and heightened crash risk.
Current Value
Trigger Level: >0.65 = tech valuations detached from economy
Historical Trend
AI Analysis
Today's NASDAQ/GDP ratio stands at 0.8477, reflecting a significant upward trend from a low of 0.6 on May 12, 2026, and accelerating sharply over the past week. This rapid increase, particularly the jump from 0.8459 on May 30 to 0.8477 today, indicates extreme tech overvaluation, as the ratio has consistently remained above the critical threshold of 0.65. This trend signals heightened recession risk, as the persistent detachment of tech valuations from economic fundamentals suggests a potential market correction. The extreme valuation levels could lead to increased volatility and a downturn if investor sentiment shifts.
What is the NASDAQ/GDP?
The NASDAQ/GDP ratio divides the NASDAQ Composite index by nominal GDP (in billions). Given NASDAQ's tech-heavy composition, this metric captures tech sector valuation relative to the real economy.
Why It Matters for Recession Risk
Tech has become a dominant share of the economy. When NASDAQ growth dramatically outpaces GDP, it echoes the dot-com bubble dynamics where tech valuations became completely detached from reality.
Historical Context
During the dot-com bubble, NASDAQ hit 5,000 with GDP around $10T (ratio ~0.5). After the bust it crashed to 1,100. Current levels near 0.65+ represent historically elevated tech valuations relative to economic output.
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