These are the 10 most overvalued stocks in the S&P 500

Published Thu, Apr 18 20243:01 PM EDTUpdated Thu, Apr 18 20243:25 PM EDT

As the market struggles to make a comeback this quarter, investors may want to steer clear of some popular stocks that have gotten too frothy. The three major U.S. indexes are lower so far this month as Wall Street's concerns about inflation and the Federal Reserve's restrictive monetary policy path remain high. The S & P 500 and tech-heavy Nasdaq Composite Index are down more than 4% this month, while the 30-stock Dow Jones Industrial Average has lost about 5%. CNBC Pro used FactSet data to screen for stocks in the S & P 500 with the largest premium valuation compared to their recent history: a higher current forward price-earnings ratio versus their 5-year average forward P/E. Shares of these companies would be considered overvalued, meaning they're trading at a current price that is not justified by their P/E ratio. Take a look at the names below: Super Micro Computer and other artificial intelligence plays, such as semiconductor manufacturing companies Broadcom and Microchip Technology , are considered overvalued, based on the screen. Semi companies have seen sky-high growth over the past year, fueled by investors' enthusiasm about generative AI. The cyclical industry has seen a slower second quarter, however, on worries that the group grew too fast. Super Micro Computer trades at a 32.9 forward P/E, which is 173% above the five-year average P/E of 12.1. The hardware maker rallied 10.6% on Tuesday after Loop Capital upped its price target by $900 to $1,500, citing its increasing confidence in the generative AI server industry and in Super Micro as "an increasing leader in the need for both complexity and scale." The stock has shed more than 6% this quarter, but has still soared 230% year to date. Microchip Technology is trading 73% above its five-year average P/E ratio of 15.8, while Broadcom is trading at a 58% premium. Microchip shares are down more than 6% this year, while Broadcom is up 13%. Eli Lilly is another overvalued name, as the stock is trading at a 71% premium to its five-year average. The pharmaceutical company is up 28% year to date, and has been a darling among investors in the weight loss drug market. The company's obesity treatment Zepbound and Type 2 diabetes drug Mounjaro continue to see strong demand , and a study released on Wednesday highlighted Zepbound's promise as a treatment for sleep apnea , adding to the potential range of health benefits of Eli Lilly's drugs. Other expensive stocks included in the list include copper producer Freeport McMoRan , pharmaceutical company Bristol-Myers Squibb and Tyson Foods .