It’s no secret that tech stocks are on fire. The major American stock indexes have reached new highs in 2024, with growth and technology companies leading the way. There are good reasons for much of these gains, such as the booms that we’re seeing in artificial intelligence and semiconductors right now.

However, not all tech stocks are created equal, and several are being overvalued. Many firms that are rallying today simply do not have the sort of fundamentals to back up these powerful moves that we’ve seen over the past 12 months.

It’s now time to be taking profits on these overvalued tech stocks. These three in particular look vulnerable to serious drawdowns in the months to come.

MakeMyTrip (MMYT)

MakeMyTrip (NASDAQ:MMYT) is an Indian online travel agency. Investors have long viewed it as something akin to the Expedia of the Indian market.

Shares have been publicly traded for more than a decade. Traditionally, they’ve had a rocky go of it with the stock essentially trading flat between 2012 and 2022. However, as the travel reopening theme took off, MMYT stock has surged over the past year.

Shares have skyrocketed from a low of $25 last year to more than $75 per share today. All told, the stock is up 217% over the past 12 months and, incredibly enough, is already up 62% year-to-date.

There’s a real story to the underlying company. MakeMyTrip is growing its earnings quickly thanks to the strong global economy and heightened travel spending. However, the travel boom is unlikely to persist forever.

Meanwhile, MMYT stock is going for more than 100 times trailing earnings and 11 times price-to-sales. The valuation looks exceedingly expensive for an online travel agency.

AppLovin (APP)

AppLovin (NASDAQ:APP) is a software company which develops and operates a mobile marketing platform and ecosystem. It offers products such as AppDiscovery, MAX, and SparkLabs.

AppLovin, as the name might suggest, primarily helps mobile application developers to monetize their programs, and further boost their marketing and consumer engagement efforts.

APP stock has gone on an absolute tear over the past year with the shares rising more than 350%. This seems completely unjustified. The company grew revenues just 17% over the past year, which is certainly a respectable rate but not typically associated with such a dramatic stock price increase.

Investors are pleased that AppLovin has been able to work around some of the privacy restrictions that Apple (NASDAQ:AAPL) and other operators have put in their ecosystems. AppLovin is certainly making progress as a business and its AI ad system is also sparking investor enthusiasm. But at 75 times trailing earnings, this seems grossly overvalued for a company with a fairly pedestrian revenue growth rate.

Dell Technologies (DELL)

25 years ago, Dell (NYSE:DELL) was a popular investment as it was at the forefront of major trends in consumer electronics hardware.

But times change. The Dell of today has become a somewhat stodgy IT vendor that has traditionally earned a low valuation from Wall Street. The company has barely grown top-line revenues in recent years, making it a cash cow but one with seemingly limited upside.

In today’s market, a dash of artificial intelligence will cause a stock to skyrocket. DELL stock is now up 225% over the past 12 months pushing the normally staid hardware company up to a surprising 30 times P/E multiple.

Make no mistake, Dell is selling some AI enabled servers and hardware. To some extent, Dell will benefit from current trends. However, the move seems grossly overdone. Morningstar analyst William Kerwin sees more than 50% downside for DELL stock from current levels as the hype wears off.

On the date of publication, Ian Bezek did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.