Insider Monkey

10 Oversold Tech Stocks to Buy

Affan Mir
12 min read

In This Article:

In this article, we discuss the 10 oversold tech stocks to buy. To skip the detailed analysis of the technology services industry, go directly to the 5 Oversold Tech Stocks To Buy.

The technology sector has been booming so far in 2023, mostly due to the generative artificial intelligence segment. Artificial intelligence (AI) has been on the rise for the past few years, but companies are leaning towards investing in the sector more than ever in the current year. According to a survey by CNBC, when companies were asked which technologies they expected to allocate the most capital to over the next 12 months, 47.37% chose AI as their top choice. Other options included, cloud computing, and the Internet of Things (IoT). Nayur Khan, Partner at McKinsey says:

“We are at an inflection point with artificial intelligence. Generative AI has captured both mainstream and business imaginations. Organizations that are willing to continuously learn and adapt their processes, ways of working, and technology to industrialize ML will succeed in building the muscle needed to leverage AI at scale and unlock its value.”

While another Senior Partner, Delphine Nain Zurkiya adds:

“We often get asked by executives if generative AI is hype or a fundamental shift—the answer is both. From a scientific point of view, foundational models are not hype—they comprise a new class of AI that is elegant in its simplicity yet incredibly powerful in its ability to be tuned to perform many tasks in a human-like manner. From a business point of view, these technologies have the potential to fundamentally disrupt entire categories.”

The technology sector has been performing well for the past decade but it seems like 2022 just wasn’t its year. Between January to June 2022, the tech-heavy NASDAQ composite was down 29.5% and finished the year with a decline of 32.5%. It was the second-worst year for the NASDAQ composite since 2002. The first one was during the Great Recession of 2008 when it went down 40.5% for the full year. Nevertheless, we cannot single out the sector in 2022 because it was one of the worst years for the global economy and US equities. The only sectors that ended with positive returns in the year were energy and utilities. On top of that, the investments in the tech sector still managed to reach over $1 trillion in 2022, despite the tough economic conditions.

The biggest names in the tech industry have been enjoying the year so far even though the macroeconomic headwinds from the previous year still haven’t phased out. On May 30, NVIDIA Corporation (NASDAQ:NVDA) became the first chip company to touch the $1 trillion market cap milestone and is almost up 210% YTD at the time of writing on August 2. Other elites such as Meta Platforms, Inc. (NASDAQ:META), Amazon.com, Inc. (NASDAQ:AMZN), and Microsoft Corporation (NASDAQ:MSFT) have also experienced significant gains this year and are up nearly 153%, 50%, and 37% YTD, respectively. A lot of the growth of these companies can be attributed to investments during the COVID-19 pandemic. According to research, the companies that doubled down on their tech investment during the pandemic are now growing five times faster than the ones that didn’t.

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