It may be time to consider adding technology stocks to investment portfolios. According to a recent report from Goldman Sachs strategist Peter Oppenheimer, the technology sector's continued underperformance has begun to create attractive valuation opportunities for investors. The valuation of the sector relative to consensus growth expectations has fallen below that of the global market as a whole.

Oppenheimer added that these factors open a window for positioning in the tech sector—growth remains strong, but valuations are now at low levels. In the United States, the valuation premium for leading cloud service providers has declined to levels nearly in line with the rest of the market.

The year 2026 has not been favorable for technology stocks, due to several factors. Major cloud service providers such as Microsoft and Amazon have significantly increased capital expenditures, raising concerns about whether these massive investments will yield corresponding returns.

Investors are also worried that such investment costs are severely eroding corporate cash flow and balance sheet flexibility. Oracle serves as an extreme example of these concerns: to support its AI infrastructure construction plans, the company had to raise debt and recently cut 30,000 jobs. Other tech giants are taking similar measures.

Oppenheimer explained that throughout history, from steam engines and railways to personal computers and the internet, technological breakthroughs have often attracted huge capital investments in underlying infrastructure, only to deliver relatively low returns. The benefits eventually accrued to other companies, many of which built their businesses on earlier foundational investments.

At the same time, the spending surge by top cloud service providers, combined with the rollout of a new generation of large language models (LLMs), has shifted investor concerns toward companies that may suffer the most in the AI transformation.

Oppenheimer noted that investors are eager to avoid the next Kodak, IBM, Nokia, or BlackBerry—companies whose business models collapsed under the pressure of a new wave of innovation. Geopolitical tensions, such as the conflict involving Iran, have further widened the gap between AI beneficiaries and companies exposed to consumer and macroeconomic pressures, dampening sentiment in the technology stock market. In other words, investors are shifting funds toward sectors that benefit from wartime conditions, such as oil and defense, amid current uncertainties.

By early April 2026, the combined market value of the "Magnificent Seven" tech giants had evaporated by $1.1 trillion.