Investment Opportunities in a Downturn
In 2026, the tech sector is facing significant challenges. Many stocks have dropped significantly, some by more than 25%. There are definitely some promising investment opportunities here, but it’s crucial that investors don’t let this chance slip away—it’s something that may not come again for a while.
Three stocks I’m particularly interested in as potential rebound candidates are: Microsoft, Broadcom, and Meta Platforms. Each of these stocks is down over 25%, making them intriguing buys right now.
1. Microsoft
It’s surprising to see Microsoft down more than 30% from its peak. Over the last ten years, this has only happened once, at the end of 2022. Looking back about four years, many thought we were heading into a recession, and although that didn’t materialize, it heavily impacted stock sales at the time. For Microsoft, such a significant drop seemed almost natural then.
Unless we’re facing another substantial economic downturn, it’s hard to justify Microsoft’s current price drop from its previously high values.
Microsoft is a frontrunner in artificial intelligence (AI) and its platform is becoming a favored choice for developing AI applications. I think it’s well-positioned for the technological future ahead, and this dip in stock price presents a solid buying opportunity.
2. Meta Platforms
Similar to Microsoft, the decline in Meta’s stock can be attributed to its ambitious capital investment plans, which are projected to be between $115 billion and $135 billion this year. This represents nearly all of the company’s cash flow and highlights the significance the company places on AI for its future. However, the market seems hesitant, leading to a drop of over 25% in stock price from its peak.
Looking closely, though, Meta’s operational execution seems strong. Their revenue saw a 24% year-over-year increase in the last quarter, and they maintain an impressive advertising platform across their social media channels. Meta is actively developing new AI solutions, and while this is commendable, the market’s skepticism stems from the heavy financial commitment to AI.
Currently, Meta’s stock is trading at only 19 times its forward earnings, which indicates it could be an attractive buy right now.
3. Broadcom
Lastly, there’s Broadcom. It’s somewhat surprising that it’s experiencing a downturn, especially given the excitement around its custom AI chips. Their custom AI chip segment appears to be facing some difficulties against competitors like Nvidia.
Broadcom collaborates closely with AI hyperscalers to create specialized chips for AI tasks. This approach offers excellent performance at a reduced cost but sacrifices some flexibility. It seems that AI hyperscalers are willing to make this trade-off, and as a result, Broadcom’s chip business has been expanding swiftly.
In the first quarter of fiscal 2026, their AI Semiconductor revenue hit $8.4 billion, indicating a strong annual performance that could total around $34 billion. CEO Hock Tan is optimistic, estimating that custom AI chips alone will generate $100 billion by the end of 2027. This anticipated growth is remarkable, even at a premium price. Given that the stock has dipped 25% from its peak, it’s definitely worth considering for purchase now.
