Investors looking for tech bargains may want to pay attention to how long-time technology investors have dealt with disruption — using pullbacks like the August drop in the Nasdaq to pick up favorite names at bargain prices. Although 2023 has so far been a mirror image of 2022, with tech stocks triumphing as excitement grows around the promise of artificial intelligence, that rally faced some reversal in August. The technology-dominated Nasdaq Composite and Nasdaq 100 indexes posted their worst month of the year in August, and their weakest performance since December 2022. .NDX 1M Nasdaq 100 Mountain Over the past month as some technology stock prices retreated, however, many portfolio managers took advantage of the opportunity. To pick up some of our favorite AI picks. Despite the volatility that is expected to continue into the fourth quarter, they say there is no better time to find opportunities. “If there’s a pullback, I’ll buy,” said Paul Meeks of Independent Solutions, a wealth manager who has been monitoring the group for more than 30 years. “I don’t think we’re going to see any kind of technology downturn, but with the exception of a couple of notable figures, we’ve seen the bulk of technology gains this year.” August anxiety? Last month’s decline came as no shock to many veteran technology investors. In fact, Meeks has been preparing to withdraw and integrate into the sector for several months, considering the technology’s operation to be justified, but it is still evidence that it has been operated “too quickly.” The decline in popular technology giants and semiconductor makers came after stellar returns during July and came despite a set of quarterly results that were better than feared and a second straight quarter of Nvidia blowout. Among August’s losers were popular AI-related names Marvell Technology and Advanced Micro Devices, which lost more than 10% and 7%, respectively. Meta Platforms shares fell 7%, while Apple lost more than 4%. Fortinet stock was the worst-performing stock on the Nasdaq-100, falling 23%. However, some major AI winners were able to buck August’s downtrend. For example, Nvidia stock jumped 5.6% even as the Nasdaq Composite fell 1.6%. Investors may be concerned that the technology trade has reached its peak, according to Gene Munster of Deepwater Asset Management, who has analyzed or invested in the sector since before the dot.com bubble. “There is immediate concern from investors, which is a good thing at the moment,” he said. “It’s a psychological game. What investors need to see are the September numbers [to] Give them some assurance that good things can keep happening. The companies he’s watching include names he’s been betting on for the better part of a year, such as Marvell, Broadcom, Taiwan Semiconductor and Advanced Micro Devices. He also monitors Synopsys and Cadence Design Systems on the software side. Of business, through any weak links. Shares of MRVL 1M Mountain Marvell Technology fell, and Monster used August’s volatility to snap up some Etsy shares. Although he is not a dominant player in the AI arms race, he believes Wall Street does not appreciate the degree to which it has reached. It could benefit from AI that fuels creativity. Elsewhere, the sector’s difficulties last month gave AXS Investments CEO Greg Bassuk an opportunity to buy companies with products and services that he sees as benefiting from AI in the long term. This includes Adobe, with its growing customer base and the opportunity to revolutionize content creation by leveraging artificial intelligence. Another beneficiary of AI is Salesforce, a leader in customer relationship management solutions, he said. Broadcom shares fell last week despite better-than-expected results as investors appeared to be paying more attention to its consistent forward guidance. However, it should benefit from AI in the long term as demand for wireless connectivity and networking solutions grows, Basuk said. Even the largest technology companies will see ups and downs the rest of this year, Basuk said. “All of them went through periods where they were down” by several percentage points in August, he said. “These are the types of dips we recommend [investors] Take a serious look at buying opportunities.
August was a bad month for the Nasdaq. How the smart money played it
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