- AI earnings and rising uncertainty trigger a sharp selloff in technology stocks
- A steep market decline begins to surface an opportunity for disciplined investors.
- Discover a list of stocks that have fallen sharply recently and could see an explosive rebound.
Tech stocks fell sharply for a second straight day on Wednesday. The dropped 1.51% after already falling 1.43% the day before. Since its high last week, the index is down more than 4.5%.
Several major tech stocks saw steep losses. Advanced Micro Devices (NASDAQ:) slid 17.31% after releasing its . Palantir Technologies (NASDAQ:) fell nearly 12%, while Micron Technology (NASDAQ:) dropped close to 10%. NVIDIA (NASDAQ:), the world’s largest company by market value, declined 3.41%.
Earlier in the week, selling pressure was mainly seen in software stocks due to concerns around AI disruption. That weakness now appears to be spreading across the wider technology sector.
The scale and cost of building AI infrastructure are unlike anything seen before. At the same time, consumers and businesses are adopting AI tools at a very fast pace. This combination has made it harder for investors to judge how much tech stocks are really worth and what future earnings may look like.
The drop in some tech stocks is also linked to weakness in Bitcoin, which fell back to around $72,000 on Thursday morning. That decline hit crypto mining stocks especially hard, along with Coinbase (NASDAQ:) and other companies that hold on their balance sheets.
Broader economic and political risks are also weighing on markets. The has shown little urgency to cut interest rates again. Investors are also watching the risk of US involvement in Iran and rising tensions between the US and Europe, driven in part by President Donald Trump and his stated interest in exerting control over Greenland.
Steep Declines Can Open the Door to Opportunities
Rapid declines like the ones seen in technology stocks in recent days can also create opportunity. Some stocks deserve the selloff as their prices move back toward more reasonable levels. Others are falling mainly because of broad market pressure. In those cases, prices may drop to levels that investors rarely get the chance to see.
Because of this, we looked at technology stocks that have fallen sharply in recent sessions. The goal was to find high quality companies that now appear undervalued and could recover strongly in the weeks ahead.
To do this, we ran the following search on the Investing.com screener:
- Market capitalization greater than $5 billion
- Technology sector
- A fall of more than 10% over one week
- Upside potential of more than 25% according to the average analyst target
- Upside potential of more than 25% according to InvestingPro Fair Value
- InvestingPro Health Score above 2.5/5
Note: Although the basic functions of the Investing.com screener are available to all free of charge, some of the criteria used here are reserved for InvestingPro and Pro+ subscribers.
This research has enabled us to identify 11 opportunities:
- Are you subscribed to InvestingPro with a Pro+ plan? Click here to access this saved search on the screener
- You have a Pro plan and would like to switch to Pro+? Click here
More specifically, it should be noted that these US technology stocks, which fell by 10.2% to 17% over one week, are undervalued by 25.1% to 71.8% according to Fair Value, while analysts attribute upside potential of +53.3% to +116.5% to them.
Finally, note that there are many other ways to find the best stocks to buy right now, including preconfigured searches, which allow you to search for stocks that meet a set of criteria with just one click.
There are searches on themes such as “value,” “growth,” “quality,” “defensive,” and others, which allow investors of all profiles to find stocks that fit their strategy:
Please note: Some searches are reserved for InvestingPro subscribers with a PRO+ plan.
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- Fair Value: This feature aggregates 17 institutional-grade valuation models to cut through the noise and show you which stocks are overhyped, undervalued, or fairly priced.
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Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk belong to the investor. We also do not provide any investment advisory services.
