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Nvidia, Microsoft, Amazon: Buy or sell, as the Iran war shakes markets?
As the conflict in Iran continues to impact global markets, some tech stocks and the Mag 7 have been sliding. Will the AI bubble burst, or is this a buying opportunity? Patti Domm breaks down how you can get your portfolio ready for all scenarios
- PUBLISHED: Fri 27 Mar 2026, 12:01 PM UPDATED: Fri 27 Mar 2026, 12:11 PM
Even before US and Israeli attacks on Iran created turmoil in global markets, big US tech stocks were selling off amid worries about overspending and an artificial intelligence bubble. Some strategists say don’t give up on tech stocks just yet. But beware that if the stock market sell-off becomes steep, technology stocks can be among the hardest hit.
Tech Sector Under Pressure: S&P 500 Analysis
The S&P technology sector peaked in late October and has since traded sideways to lower. By mid-March, the sector was down 5 per cent for the year, but some individual stocks are down way more. Microsoft, for instance, was down 18 per cent since the start of the year.
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The global markets are facing risks from the military conflict, including serious energy supply disruptions as the war impacts producers across the Middle East. While significant threats exist, it is difficult to predict the impact or duration of rising energy prices on the global economy and the direction of markets. A major wild card for the market is the price of oil.
“My view is the same now as coming into the year — you’ve got to be selective, so that hasn’t changed,” said Dan Niles, tech investor and founder of Niles Investment Management. “To some degree, the stuff going on has stress tested the market as well as individual (technology) names, and you kind of figured out who the winners and losers are during that stress test period of time. Google, as I’ve been saying for a while, will be one of the winners in AI. Not everybody is going to win.” Alphabet is the parent of Google.
For now, US stocks continue to fall, but Wall Street appears to have been discounting a long-term conflict or a major economic meltdown. That could change, however, and technical analysts are watching key levels to gauge the potential for further decline.
Expert Opinion: Navigating market uncertainty amid conflict
“AI disruption concerns, credit concerns, now an oil price shock and still high valuations historically, and basically, the market has been range-bound between 6,520 and 7,000 for the S&P 500 for six solid months,” said Julian Emanuel, head of US equity, derivatives and quantitative research at Evercore ISI. “That to us shows underlying resilience. Could it break through the bottom end of the range for a short time? You can’t rule out anything in a volatile environment like this.”
Emanuel spoke to Khaleej Times last Friday. The S&P 500 closed at 6,632 that day, 5 per cent below its recent high.
Investment Strategy: Assessing risk appetite during Iran tensions
Investors should seriously consider their individual risk appetite during times of uncertainty and make decisions accordingly. For someone willing to take on risk and consider longer-term investments, then watching for opportunities to pick among some of the beaten-down names may make some sense. Also, keep currency exposure in mind when making foreign investments.
“One of the untold stories for the last several weeks is that software and broader technology sectors have really started outperforming the S&P 500,” said Emanuel. “This may be a sort of a stabilisation rally, but in our mind, it really is what I would call the first green shoots of investors being willing to re-engage with technology and willing to start tiptoeing back into the software sector specifically.”
The State Street SPDR S&P 500 Trust Exchange Traded Fund, which tracks the S&P 500, for instance, was down 2.7 per cent for the month ending Friday. In the same time frame, the Technology Select Sector SPDR Fund ETF, tracking the S&P tech sector, was down a slightly shallower 1.8 per cent.
UAE Investor Impact: Analysing the effects of Iran tensions on Middle East markets
As AI fears about the spillover from private credit issues plague software and other tech stocks, investors have gravitated into the so-called ‘HALO’ trade, short for ‘Heavy Assets, Low Obsolescence’ stocks. Those are in industries that tend to have hard assets that would be hard for AI to disrupt, as opposed to sectors under direct threat, like software.
The best-performing S&P sectors year-to-date have been considered to include ‘old economy’ or hard-asset companies, such as energy, materials, industrials, and consumer staples.
Sam Stovall, chief investment strategist at CFRA Research, said he sees many investors taking a more “wait and see” approach rather than jumping into new tech investments now. “My feeling is if you have cash on the sideline, leave it there. Wait,” he said.
Stovall said he is concerned that oil could trade above $100 per barrel for an extended period, creating more headwinds for stocks and the global economy. But he still expects the S&P 500 to end the year up about 6 per cent. “There’s no reason to feel like you have to do anything because just remind yourself of the speed with which the market tends to get back from pullbacks, corrections and bear markets,” he said.
For the S&P 500, he said it takes on average about six weeks to recover all that was lost in a five to 10 per cent pullback, while it takes an average of four months to get back to breakeven from a decline of up to 20 per cent. From the bottom of a 20 to 40 per cent decline, it has taken an average of 13 months for the index to recover. “Mega meltdowns” — of 40 per cent or more — have taken an average of five years for the S&P 500 to return to break even.
“The bubble started leaking enthusiasm starting at the tech peak in late October,” said Stovall.
But based on their strong earnings expectations, tech companies are beginning to look relatively cheap. For all of 2026, tech earnings are expected to grow by 35 per cent, while the overall S&P 500 companies are expected to see earnings growth of 14.3 per cent.
“Right now, the S&P tech sector is trading at an 11 per cent discount to its five-year average P/E,” he said.
Cisco and Other Tech Stocks: Opportunities in a volatile market
While technology was the market leader during the stock market’s recent gains, it can also be a leader to the downside in bear markets, which are corrections of 20 per cent or more. Tech stocks fell an average of 46 per cent in all bear markets since 1990, while the S&P 500 declined by an average of 37 per cent, Stovall added.
Niles said the decline has made some big tech stocks much cheaper. “Does Nvidia have more competitors today than they did three years ago? Absolutely. Are they still the leading-edge model out there? Absolutely. You can get Nvidia at a 23 multiple, and the revenues are growing at 70 per cent. That’s the forecast,” he said. He notes the stock has not declined as much as other big tech stocks in the “Magnificent Seven”, like Amazon, Meta, Apple and Tesla.
He also likes Cisco. “If you’re a big data centre provider and you have all these data centres in different locations… well, you’re going to need to network those together, and Cisco can do it,” he said. “Cisco’s a good risk-adjusted way of playing this.”
Emanuel said the sideways trade of the past six months is a type of correction — in time, not price — and that at some point, tech will again outperform. He said some fund managers appear to be underweight technology, and that individual investors may be the ones to move back first. “The public, who has been right consistently relative to institutional investors since the pandemic, is waiting patiently,” he said.