Goldman Sachs says tech stocks now look cheap after historic slump

Goldman Sachs Research says technology stocks have finally fallen far enough to look cheap, even after one of the sector’s weakest stretches of relative returns in roughly 50 years. In a April 7 note published April 10, Peter Oppenheimer argued that global tech shares started 2025 and 2026 badly behind the rest of the market, but the selloff has narrowed the valuation gap enough to create a technology value opportunity.

The call rests on two pressures that have hit the sector hard. Big U.S. tech companies have kept pouring money into capital spending, which has raised questions about whether those outlays will earn an adequate return and whether balance sheets can absorb the strain. Goldman said debt ratios in U.S. tech have risen from a previously net-cash position, though they remain relatively low.

The second pressure is AI itself. What was once treated mainly as a growth catalyst has increasingly looked like a threat to older software models, and Goldman said that shift has made investors far more selective about winners and losers. That is a sharp change from the broad AI enthusiasm that helped define the market, and it explains why software has been repriced so aggressively.

For Goldman employees, the distinction matters because tech remains one of the firm’s biggest engines across trading, research, ECM, derivatives and financing. A sector that is cheap but unstable could still mean more client activity, but it also forces bankers and salespeople to separate durable platforms from businesses that may be squeezed by AI competition. Goldman’s own 2026 outlook projected 11% returns for global equities over the next 12 months, which suggests the firm is not making a blanket bearish call on markets so much as arguing that leadership is broadening.

The bigger message is that tech is no longer being traded as one clean narrative. Goldman Sachs Asset Management has already described 2026 as a year of dispersion, diversification and selectivity within the Magnificent 7, and Goldman Research has been publishing a steady stream of AI and tech notes, from “Will AI Eat Software?” to “Could Value Stocks Benefit from the AI Rout?” If the group’s latest call proves right, the next phase of the trade will not be about buying tech in bulk. It will be about proving which businesses can turn AI spending into earnings before the market decides the rebound was just another value trap.