Nasdaq correction: Is tech sell-off an opportunity?

<p><strong>By George Prior </strong></p>
<p>Shrewd investors will use the tech sell-off as a buying opportunity as Wall Street’s tech-heavy Nasdaq Composite Index fell into correction territory, affirms the CEO of one of the world’s largest independent financial advisory and asset management organizations.</p>
<p>The analysis from Nigel Green of deVere Group comes as the Nasdaq, alongside the other main US and global indexes, comes under pressure from disappointing third-quarter results from Big Tech companies, high Treasury yields, higher-for-longer interest rates, and recession fears.</p>
<p>A correction happens when an index falls more than 10%, but less than 20%, from its most recent closing high.</p>
<p>He notes: “This dramatic sell-off is largely focused on the Nasdaq and tech stocks, which investors feel would be hit hardest by spiking interest rates.</p>
<p>“The Nasdaq, currently down more than 12% from its 2023 high, meaning it’s firmly in correction territory, has also been impacted by disappointing earnings recently out from the Big Tech titans.”</p>
<p>Last week, Meta slid 3.7% on Thursday after the Facebook parent company reported that advertising revenue had been weak.</p>
<p>Google-parent Alphabet also slid, falling by 9.5%, after the company fell short in its cloud business. It’s the largest decline for the stock since March 2020. Shares fell another 2.7% on Thursday morning.</p>
<p>Meanwhile, Apple fell by 2.5%. Amazon, despite reporting strong results, was down 1.5%.</p>
<p>The tech sell-off is spooking some, while some “shrewd investors will be actively using this as an important buying opportunity” for three main reasons.</p>
<p>“First, the AI Race is intensifying, as firms are racing to lead in the development, deployment, and utilisation of artificial intelligence technologies.</p>
<p>“It is going to reshape whole industries, create new ones, and fuel innovation beyond what we can currently imagine.</p>
<p>“All this AI needs enormous amounts of computing power, which is a path that leads companies directly to the likes of Microsoft, Google and Amazon,” says Nigel Green.</p>
<p>“Second, tech companies are known for their ability to pivot and adapt to changing market conditions. They’re well-equipped to weather the storm of rising interest rates and adjust their strategies to maintain profitability and relevance.</p>
<p>“Third, the market fears are presenting opportunities to purchase high-quality tech companies at a lower cost, allowing investors to potentially benefit from capital appreciation when the market rebounds.”</p>
<p>As ever, a well-balanced investment portfolio should be diversified across various asset classes, including tech stocks. Diversification helps spread risk and can provide a buffer against the impact of sell-offs in specific sectors.</p>
<p>The deVere CEO concludes: “Like those which have gone before it, this tech sell-off will provide an opportunity for investors to selectively acquire tech stocks with solid fundamentals and growth potential.”</p>
<p><strong>About:</strong></p>
<p><em>deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of offices across the world, over 80,000 clients and $12bn under advisement.</em></p>