Tech Rebound Opportunity
Digital Transformation

Tech Rebound Opportunity

Over the past month or so, there was a big rotation out of tech. The selling was only supposed to get worse … so the TV experts said. Do yourself a favor and don’t believe everything you hear.

Let’s be clear: Tech stocks were correcting. Shares of many technology companies rose too quickly, too soon. Those price excesses had to throttle back, with some being very violent.

Unfortunately, watching the shares of your favorite tech businesses get demolished isn’t much fun. Don’t think about the decline that way. Weakness, especially for the big tech platforms with strong competitive advantages, is an opportunity.

Remember, this process is healthy. It facilitates stronger bullish moves in the longer term.

Use this period to bargain hunt … because if history is any indication … this process will be short lived. We’re already seeing tech rally back.

Related Post: Digital Transformation of Industry and Finance Is Just Starting

Two picks savvy investors should consider during this most likely short-lived weakness are ServiceNow, Inc. (NYSE: NOW) and Tyler Technologies, Inc. (NYSE: TYL). And don’t let their respective rally’s this week to cause hesitation.

I have written extensively about ServiceNow in the past. The company operates a software platform that is akin to an operating system for large enterprises. The business is strong and will be helped by an improving economy. Shares are currently trading near $508.58 and are down around 14% from its recent all-time high on Feb. 11 of $594.47.


Tyler might be more of an unfamiliar name to most investors. The Plano, Texas-based company is ground zero for the digital transformation of municipal, state and federal government software infrastructure. Tyler’s forte is removing physical paper from these systems. It’s a big business with plenty of runway. Shares are down from around $477 to around $411.83.

Meanwhile, the shares of other businesses are on the rise as traders look forward to stronger consumer spending and a return to the pre-pandemic economy. There are a handful of retailers and financial issues on my radar. In each case, these are businesses that have either undergone digital rebirth or have strong online DNA.

Related Post: Tech Stocks Poised for Rebound

Other stocks investors should be considering include Bed, Bath & Beyond Inc. (Nasdaq: BBBY), The Gap, Inc. (NYSE: GPS), Macy’s, Inc. (NYSE: M), Square, Inc. (NYSE: SQ) and PayPal Holdings, Inc. (Nasdaq: PYPL).

There’s a lot of volatility right now, so investors should be cautious. However, the main theme will stay the same: There’s plenty of undervalued stocks right now and investors should be able to use this weakness as a great buying opportunity.

Stay patient but ready.

Best wishes,

Jon D. Markman

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