Remember when everyone was freaking out about AI taking over the world? Well, tech stocks got so beaten down in Q1 that they’re now cheaper than they were *before* ChatGPT showed up and changed everything. If that’s not a “buy the dip” signal, I don’t know what is.
Here’s the deal: Tech valuations have compressed from 40x earnings down to 20x—basically back to 2022 levels. The Iran War, market jitters, and general tech sector pessimism have created what Futurum CEO Daniel Newman is calling a “historically opportune moment” to jump back in. Translation: prices are stupid cheap right now.
The sector kicked off 2026 getting absolutely hammered, down over 9% in Q1. But here’s where it gets interesting. Oracle led a software rally on Monday with shares jumping 12%, and a growing chorus of Wall Street pros are saying this could be the start of something much bigger. Adam Kobeissi, founder of the Kobeissi Letter, put it bluntly: “Tech valuations are now LOWER than they were when ChatGPT was announced. As the Iran War drives markets lower, AI is only getting bigger. Record highs are on the horizon.”
The timing actually makes sense. First-quarter earnings season is about to kick off, and tech companies are expected to lead the charge. Ryan Detrick, Carson Group’s chief market strategist, notes that while the sector has pulled back, earnings haven’t—so when those results drop, they could be a fresh catalyst for a rally. Translation: the numbers are probably going to look better than the stock prices suggest.
Dan Ives from Wedbush, one of Wall Street’s most vocal AI bulls, is telling clients to focus on tech winners that are now “on sale.” He’s eyeing cybersecurity plays like CrowdStrike, Palo Alto, and Zscaler, plus software names like Microsoft, Salesforce, ServiceNow, and Palantir. Goldman Sachs is also pointing to “secular growth” stocks—companies whose profits aren’t tied to the broader economy—as poised for a new chapter. Think Nvidia, Meta, Broadcom, and Micron Technology.
The key insight here is that not all tech will bounce back equally. Newman flagged some Magnificent Seven names—Alphabet, Meta, Amazon, Microsoft, and Nvidia—as the ones most likely to benefit. These are companies that aren’t getting disrupted by AI; they’re the ones *doing* the disrupting.
So what’s the takeaway? Tech stocks got crushed, valuations reset to pre-AI-boom levels, and Wall Street’s best minds are saying the setup is perfect for a rally. Earnings season is about to prove whether the pessimism was justified or just panic. Either way, if you’ve been waiting for a better entry point into tech, this might be it.
