Vanguard Information Technology ETF: Overvalued Tech Holdings

The Vanguard Information Technology ETF (VGT) is a low-cost index fund that tracks the performance of the Information Technology Spliced Index. Its holdings are primarily large cap tech names. The fund has performed well, but its current price is considered too expensive by the author.

The Vanguard Information Technology ETF (VGT) has been a popular choice among investors seeking exposure to the tech sector. Launched in 2004, VGT is a low-cost index fund that tracks the performance of the Information Technology Spliced Index. As of July 2, 2025, the VGT stock price stands at 613.44, with the fund listed on the NYSE stock exchange [1].

VGT's holdings are primarily large-cap tech names, providing investors with a diversified portfolio of leading technology companies. The fund has demonstrated strong performance, with analysts projecting 8% year-over-year (YoY) earnings per share (EPS) growth for the aggregate S&P 500, indicating potential upside for tech stocks [2].

However, despite its performance, some analysts argue that the current price of VGT is considered too expensive. The VGT stock price today is 613.44, which some investors believe is not justified by the fund's current dividend yield and dividend history. To assess the potential returns, investors can sign up to InvestingPro, where they can evaluate the stock price fair value and other essential metrics [1].

The tech sector has been at the forefront of adapting to the new trade environment, with U.S. firms like Apple and Microsoft accelerating supply chain relocations to bypass tariffs. The EU's Digital Markets Act (DMA) and Digital Services Act (DSA) have also forced U.S. tech giants to invest heavily in local data centers and compliance teams. For investors, the sector presents a mix of risks and opportunities, with companies leveraging AI-driven automation and cloud infrastructure gaining efficiency [2].

The Vanguard Information Technology ETF (VGT) has seen inflows as investors bet on resilient tech firms, reflecting the sector's resilience in the face of trade tensions and regulatory challenges. However, the fund's performance and valuation must be carefully evaluated by investors to determine if it aligns with their investment objectives and risk tolerance.

References:
[1] https://www.investing.com/etfs/vanguard-information-tech
[2] https://www.ainvest.com/news/eu-trade-deal-implications-global-tariffs-equity-markets-2507/