The Late-Stage Bull Market Is a Buying Opportunity for Tech

• Tech stocks are down 2.15% year-to-date, making it the second-worst performing S&P 500 sector, with some names like Salesforce down 43% YTD and UiPath down more than 46%.
• Multiple tech stocks show extreme oversold conditions with RSI readings between 18-33, while analysts project significant upside potential of 25% to 48% over the next 12 months for names like HubSpot, Intuit, and Adobe.
• Historical data supports continued bull market momentum, as average bull markets last 5-7 years and fourth-year cycles (where 2026 sits) typically deliver positive returns, with Morgan Stanley noting that 'investors who take higher risk may be rewarded'.

Market Summary: Late-Stage Bull Market Presents Tech Buying Opportunity

Key Market Movements

The NASDAQ has declined 5% from its October 2025 all-time high and is down 2.15% year-to-date as of February 24, 2026, making technology the second-worst performing sector among the S&P 500's 11 sectors. Despite finishing 2025 with nearly 34% gains, tech stocks have underperformed as investors rotate toward defensive sectors.

Company Performance and Valuations

Several major tech stocks are significantly oversold, presenting potential buying opportunities:

• Salesforce: Down 43% YTD, RSI 20, 21% downside from 52-week high
• HubSpot: Down 46% YTD, RSI 18, 39% downside from peak
• Workday: Down 34% YTD, RSI 28
• Adobe: Down 26% YTD, RSI 33
• Intuit: Down 21% YTD, RSI 26
• The Trade Desk: Down 25% YTD, RSI 24

Improving valuations indicate better value propositions. Meta Platforms trades at a forward P/E of 24.13 with 27.35% YOY EPS growth. Adobe's forward P/E stands at 14.78, while Paychex and Accenture trade at 17.72 and 15.77 respectively.

Market Implications

Morgan Stanley's Andrew Slimmon argues this represents late-stage bull market maturity rather than cycle termination. Historical data shows bull markets typically last 5-7 years, with fourth years (like 2026) usually delivering positive returns. Analysts suggest high RSI readings and significant YTD losses indicate oversold conditions, with analysts projecting substantial upside for many names over the next 12 months.

The pullback may offer strategic entry points for growth-focused investors maintaining long-term conviction in technology sector fundamentals.