This chart from Bernstein shows growth stocks are not extremely overvalued and can keep running

FAANG stocks displayed at the Nasdaq.

Adam Jeffery | CNBC

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For investors worried that growth stocks’ valuations are approaching extreme levels last seen during the dotcom bubble, Bernstein said they are looking at the wrong place.

The Wall Street firm said many market watchers are focused on tech multiples relative to the broader market and draw comparisons to the 2000s. But due to the different macro environment, this method doesn’t paint an accurate picture of the valuation of the growth sector. 

Instead, Bernstein said investors should look at high-growth stock valuations compared to their low-growth peers, and they are still far from the extremes of 20 years ago.