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 is 0.7671, marking a significant increase from 0.6 on March 30, 2026, and reflecting a consistent upward trend over the past three weeks. This acceleration in the ratio indicates extreme tech overvaluation, as it has risen sharply from a midpoint of 0.7199 on April 9, suggesting that tech valuations are increasingly detached from economic fundamentals. Given this trend, recession risk is elevated, as the sustained rise above the critical threshold of 0.65 signals a potential market correction ahead, with valuations that may not be sustainable in the face of economic realities.
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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