Low valuations in tech stocks could offer a good entry opportunity for investors.

Goldman Sachs: Tech Stocks Are Cheap Now, Offering a Buying Opportunity

Tech stocks have been underperforming for a while—and that's made them cheap, according to Goldman Sachs. The firm said the prolonged weakness has created a potential entry point for investors. "We have witnessed one of the weakest periods of relative returns for the tech sector in 50 years," the bank said.

Since 2025, several factors have weighed on tech, pushing investors toward value stocks. Those include the launch of DeepSeek, massive capex from US hyperscalers, and the disruptive impact of AI-driven software. But that same dynamic has opened the door for investors to step in—with the sector still seeing strong growth but now at lower valuations.

Valuation premiums for US hyperscalers have come down and are now nearly in line with the rest of the sector. Globally, IT sector P/E multiples have fallen below consumer discretionary, consumer staples, and industrials.

Goldman also noted that despite the low valuations, tech earnings remain robust. For the S&P 500, the IT sector is expected to post 44% EPS growth in Q1—accounting for 87% of the index's total EPS growth.