By George Glover
Big Tech stocks have taken a battering lately -- but investors should take the opportunity to buy the dip as the Iran war drags on, according to Goldman Sachs.
Tech in 2026 has posted one of its worst periods of relative underperformance of the past 50 years amid a pivot to value stocks, analyst Peter Oppenheimer said in a research note on Tuesday.
The selloff has made members of the megacap Magnificent Seven group look undervalued. Facebook owner Meta Platforms, IT company Microsoft, and chip maker Nvidia are all fetching less than 20 times expected earnings for the next 24 months, the analyst noted.
Oppenheimer believes the relatively cheap stock prices should ease fears about a potential tech bubble. The market's dominant companies were trading at sizable premiums before previous selloffs like the dot-com crash, he added.
Geopolitical tensions have made life even tougher for Nvidia and its Big Tech peers. Roundhill's Magnificent Seven exchange-traded fund is down about 5% since the Iran war started on Feb. 28.
But the longer the conflict lasts, the more upside Big Tech can offer, according to Oppenheimer, who said a drawn-out war would strengthen the case for central banks to cut interest rates in order to stave off a recession.
"The risk is that the longer the disruption to the Strait of Hormuz continues, the more this morphs into a perceived growth shock, limiting interest rate rises," Oppenheimer wrote.
"Given the relative insensitivity of the cash flows in the technology sector to economic growth, and the benefit it would derive on any rally in bond yields, this sector might prove to be more defensive over the next few months."
Nvidia shares slid 1.1% to $175.65 ahead of Tuesday's opening bell after a filing by rival chip maker Broadcom revealed it had a deal with Google.
Four other members of the Mag 7 were also sliding, but Google owner Alphabet and online retailer Amazon were a touch higher.
Write to George Glover at george.glover@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 07, 2026 07:17 ET (11:17 GMT)
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