Technology stocks have become the market’s biggest worry in 2026, after powering almost every major index higher throughout 2024 and 2025, Goldman Sachs notes. If you own a broad index fund, the Magnificent 7, or anything with heavy Nasdaq exposure, the shift is showing up in your quarterly statements.
Investors have been pulling back from software, chips, and platform giants over fears that AI spending may never match the returns analysts once promised. Goldman Sachs has stepped forward with a call that runs counter to the market mood and could reframe how you view your tech holdings this year.
Here is what Goldman’s research team is saying, what it means for the value opportunity in tech, and how to think about it carefully.
Goldman Sachs sees a rare value setup forming in global tech
The global technology sector has just experienced one of its weakest periods of relative returns in 50 years, according to Goldman.
The sector’s valuation has fallen below that of the broader aggregate global market, creating what chief global equity strategist Peter Oppenheimer calls a “technology value opportunity.”
In the U.S., the valuation premium of the five biggest tech names has compressed almost to the same level as the rest of the market, Goldman notes. The global tech sector’s price-to-earnings ratio now trades below consumer discretionary, consumer staples, and industrials, a positioning nearly unheard of in recent history.
Oppenheimer published these findings in a note dated April 7 as a follow-up to the early 2026 sell-off that spread through software companies, according to Goldman. The call lands as many retail investors are wrestling with the sharp reversal in their longstanding tech winners and reviewing their own risk tolerances.
The earnings picture behind this year’s tech sell-off
The price action looks nothing like the fundamental picture, and that gap sits at the center of Goldman Sachs‘ value opportunity thesis for tech. Tech companies revised their earnings upward more than any other sector globally in 2026, creating a record gap between performance and underlying earnings growth.
“The underperformance of the technology sector is starting to generate attractive opportunities for investors as its valuation, relative to expected consensus growth, has fallen below that of the global aggregate market,” said Peter C. Oppenheimer, chief global equity strategist.
S&P 500earnings per share are projected to grow 12% year over year in Q1, largely driven by tech heavyweight contributions, according to analyst consensus. AI investment spending will account for roughly 40% of S&P 500 EPS growth this year as those investments translate into returns.
Information Technology is expected to lead Q1 earnings growth among all 11 S&P 500 sectors, with net profit margins rising to 28.9%, according to FactSet. The forward 12-month price-to-earnings ratio for the S&P 500 sits at 20.4, above its 5-year average (19.9) and its 10-year average (18.9), but below the 22.0 year-end mark, FactSet added.
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Why tech stocks stumbled after years of market dominance
Several forces built up pressure on the sector during 2025, and the early 2026 sell-off revealed how fragile the leadership had become beneath the surface.
The first concern is capital expenditure, with the top four U.S. hyperscalers collectively spending roughly $400 billion on AI infrastructure during 2025 alone. That figure represents nearly 70% more than 2024, and history shows infrastructure booms often enrich later adopters rather than the original network builders, according to Goldman.
Second, investor attention shifted from AI’s upside to the risk that the technology could gut the software businesses built steadily across the last decade. Investors began questioning the terminal values of long-duration growth stocks, which had previously enjoyed years of unwavering market confidence, Goldman added.
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Third, rising capex has made tech’s future growth far more dependent on physical infrastructure, which plays to the strengths of capital-heavy industries. Capital has rotated into energy, basic resources, and industrial firms that benefit from AI’s power demands, cooling requirements, and grid buildout needs, Goldman pointed out.
Finally, several big tech balance sheets have begun to strain, with debt ratios rising from prior net cash positions across the broader sector. These debt ratios remain relatively low, yet the clear direction of travel has unsettled investors long accustomed to fortress-level corporate finances, Goldman explained.
What Goldman’s call could mean for your portfolio
If you hold tech-heavy index funds, the Goldman signal suggests your exposure may be sitting at more reasonable valuations than the daily headlines now indicate. Earnings tell a markedly different story from prices, because tech is posting higher revision rates than any other sector across global markets in 2026.
For ordinary investors, this gap between price action and underlying fundamentals could present buying windows for dollar-cost averaging, rather than one-time concentrated purchases of single stocks.
The case for tech exposure is less about timing the bottom and more about aligning positions with consensus growth that beats the reduced analyst expectations. Morgan Stanley has set a similar tone, pegging the S&P 500 at 7,800 by year-end 2026, with performance heavily dependent on tech-led earnings.
Risks that could derail Goldman’s tech opportunity thesis
Goldman did not tell investors to load up blindly, and Oppenheimer flagged real risks that could undermine the case for tech at current levels, according to Goldman Sachs.
A severe credit shock or collapse in big tech revenue could jeopardize AI spending plans, which would hit hyperscaler earnings and chip suppliers hard. Concentration risk matters, too, because the Magnificent 7 account for about one-third of the S&P 500’s market capitalization.
If AI adoption disappoints over the next few quarters, software and chip stocks with stretched valuation support will likely suffer the first and sharpest drawdowns. Regulation, especially any new U.S. export controls on AI chips going to China, could reshape revenue expectations for names like Nvidia, AMD, and Broadcom.
Practical steps you can take before adding tech exposure
The Goldman setup rewards planning over quick trades, and there are several concrete steps you can work through in your accounts over the coming weeks. Start by reviewing how much tech sits inside your portfolio, since index funds can quietly push your exposure above what you realistically think you hold.
Analysts broadly describe AI adoption as a long-horizon, multi-year process, so align your timeline accordingly rather than chasing short-term price moves. Another healthy habit is writing down your reasons for owning each tech stock, since clarity on your investment thesis protects against panic decisions during drawdowns.
Portfolio checks worth running this month
- Review your S&P 500 tech weighting across both retirement and brokerage accounts to see real exposure.
- Check Magnificent 7 concentration, which often exceeds 30% of U.S. equity exposure inside index funds.
- Compare expense ratios on tech ETFs before adding new positions or switching between competing funds.
- Review rebalancing rules so profits trim back winners rather than compound single-stock concentration risk.
- Confirm emergency savings are separate from any speculative AI bets or tech-heavy growth positions.
What to watch next as tech’s setup plays out
The Q1 earnings season, starting in mid-April, will test whether the record gap between tech prices and underlying profits begins to close in either direction soon.
Capital expenditure guidance from Microsoft, Alphabet, Amazon, and Meta will provide the clearest signal on whether hyperscalers are maintaining spending commitments into late 2026. NVIDIA’s next earnings release on May 27 will test chip demand, particularly as the Vera Rubin platform ramps into production in the second half.
Pay close attention to software stock recoveries, since that group led the early 2026 selloff and often signals a turning point for the broader sector. If Oppenheimer’s call proves correct, patient investors with diversified, disciplined exposure could benefit, while the rest of the market stays fixated on the daily noise.
Even if you miss the exact low, history shows rebalancing into unloved sectors has tended to pay off for investors with disciplined, long-term mindsets. If you are unsure how to position, consult a fiduciary financial advisor who can review your specific tax situation, risk tolerance, and overall time horizon.
Related: Goldman Sachs drops a bombshell on software stocks
