Despite resilient earnings forecasts and solid operational progress among UK tech companies in 2025, sector multiples were negatively impacted by a number of headwinds, ranging from tariff-related market volatility to concerns about excessive valuations across the artificial intelligence (AI) theme. Encouragingly, however, businesses are pressing ahead with IT investments despite ongoing macroeconomic uncertainty, while attractive valuations among growth stocks have the potential to spark a recovery in the sector.
Report highlights
20x
The UK tech sector currently trades at around 20x its forward price/earnings (P/E) ratio, creating a supportive backdrop and attractive entry point for investors.
29x
The average UK tech P/E ratio between 2005 and 2025 (adjusted to remove the Covid-related spike).
+16.7%
Data-centre investment is forecast to rise in 2026, supported by the build-out of AI-related infrastructure.
39x
Cyclically adjusted P/E ratio on the S&P 500 in 2025 – still below the levels seen ahead of the dotcom crash. While AI is not a primary revenue driver in the UK, the theme should continue to function as a catalyst for IT spending.
Browse articles in