Tech stocks comprise many of the S&P 500 and the Nasdaq Composite. This sector features many highgrowth companies that can scale their revenue and profits over time. Many corporations within the industry have annual recurring revenue models. However, a major weakness of most tech stocks is that they amass high valuations. Many investors get excited about a tech stock's long-term potential, and they pile into the stock. That results in astronomical P/E ratios. Those elevated valuations require impressive fin ...