Goldman Sachs (NYSE:GS) Chief Equity Strategist Peter Oppenheimer made a very interesting call last week, calling the sell-off a rare “buying opportunity” in U.S. tech stocks. The call was incredibly well-timed as it came right ahead of a big rally in the broad markets as investors grew hopeful over the Iran-U.S. ceasefire.
Of course, just because the stock market has found its way doesn’t mean that the opportunity in tech has come and gone. With AI, once again, causing a panic in software stocks, I do think that Oppenheimer and company are wise to point to the tech sector as a place to get great value for your investment dollar.
Goldman’s Oppenheimer is right. You don’t have to look far for a deal in tech these days
While time will tell if the bottom is in for the tech sector, I think it’s hard to argue against the now depressed valuation metrics. From price-to-earnings (P/E) to PEG ratios, tech hasn’t looked this cheap in quite a while.
And as investors stay cautious, even slightly bearish, over high AI capital expenditures, the seemingly dire fate of software, as well as the potential negative impact of AI on the economy, it might be time to swoop in while earnings expectations are low and investor sentiment, especially in tech, has taken quite the beating.
What’s most interesting isn’t the modest multiples, but that some tech names might serve as a great way to play defense as the conflict in the Middle East continues to play out. I’d say Oppenheimer is right on the money. The first few days of the ceasefire have not gone smoothly. And if things escalate, tech may very well be destined to go its own way. The AI impact might be a bigger deal for tech than the next move in the Iran war.
Netflix
Undoubtedly, some of the Magnificent Seven darlings, as well as Netflix (NASDAQ:NFLX | NFLX Price Prediction), stand out as reasonably attractive stocks at a time like this. In a prior piece, I highlighted Netflix stock as a great defensive name for the current market climate.
Given Goldman’s $120 per-share price target on the stock, the name certainly does stand out as a great pick, especially as the firm shows off its pricing power once again as it hikes prices while betting big on live sports. At around $103 per share, Netflix stock might be in for a 16% gain from current levels, even after that sudden bounce off February’s lows.
Of course, the 32.3 times forward price-to-earnings might not seem all too cheap compared to the other names in the Mag Seven bargain bin, which, I think, you could do well by scooping up the broad basket.
Apple
It’s hard to go wrong with shares of Apple (NASDAQ:AAPL), as the name looks to finally catch on in AI with Siri, while also looking to cash in on the budget consumer, and impressing high-end consumers willing to spend on the latest and greatest.
The latest M5 chip is a pretty big deal, given the improved AI and graphical performance. Of course, to most, the chip seems to be an iterative upgrade to the M4. However, once Apple Intelligence gets to a level where it needs to be, I’d argue that Neural Accelerators could be what grants Apple a front-row seat to the edge AI revolution.
As for Goldman, it has a $330 price target, which is actually quite a bit higher than most other analysts. Given the 2026 catalysts, I’d argue a 30.0 times forward P/E is a very reasonable price to pay for a company that’s quietly become a Mag Seven outperformer in recent months.
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