Analysts at Goldman Sachs, led by chief global equity strategist Peter Oppenheimer, have flagged a potential buying opportunity in Big Tech stocks, arguing that a sharp pullback exacerbated by the ongoing Iran conflict has reset valuations to more compelling levels. The sector's underperformance in 2026, described as one of the worst relative periods in decades, has pushed its valuation below that of the global aggregate market relative to expected consensus growth.
The downturn follows a record-high rally in October, driven by robust earnings, but sentiment shifted as investors grew wary of massive AI infrastructure spending. Major cloud companies have committed over $700 billion to data center expansion. This, combined with a rotation into value-oriented sectors, has weighed heavily on technology shares. The selloff has particularly affected the "Magnificent Seven" megacap stocks, with several—including Meta Platforms, Microsoft, and Nvidia—now trading at less than 20 times expected earnings over the next two years, a level analysts say reduces concerns about an overheated sector.
Oppenheimer contrasted these lower valuations with previous cycles like the dot-com era, when tech firms traded at significantly higher premiums before major corrections. The Roundhill Magnificent Seven ETF has declined about 5% since the Iran conflict began in late February, highlighting the direct impact of geopolitical risk on investor sentiment.
While the conflict adds uncertainty through its impact on energy markets and global growth, Goldman analysts suggest a prolonged disruption could paradoxically support tech stocks. Oppenheimer wrote, "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." He argued that given the technology sector's relative insensitivity to economic growth and its benefit from any rally in bond yields, it might prove more defensive in coming months. Lower interest rates would typically support growth-oriented tech valuations.
Meanwhile, capital has flowed into traditional "old-economy" sectors. Goldman's basket of capital-intensive "HALO" stocks, including utilities and manufacturing firms, has gained about 11% year-to-date, reflecting expectations of increased spending on energy supply and AI infrastructure buildout.
The report comes amid broader market concerns, including insider selling signals. SEC filings reviewed by Motley Fool show that over the two years ending April 2, 2026, insiders at Nvidia, Apple, Alphabet, Microsoft, and Amazon sold a net $16.1 billion more stock than they purchased. Despite these signals and a combined $1.1 trillion loss in market value for the Magnificent Seven, Oppenheimer maintains that strong sector fundamentals, high return on equity, and positive earnings revisions present an opportunity where "growth rates remain strong, but valuations are now low."
