AI and chip stocks experienced significant losses on Friday, contributing to a 4% decline in the Nasdaq index. This drop follows a period of rapid growth, suggesting a need for a market recalibration. Investors are advised to focus on tech stocks outside the AI and semiconductor sectors that haven’t reached new highs yet.
Netflix (NFLX) has declined nearly 40% from its 2025 highs and currently trades at a forward earnings ratio of 22X, just below the technology sector average. The company is projected to increase its earnings by 42% in 2026. Meanwhile, Uber (UBER) has fallen 30% since October but has a Zacks price target indicating a potential 48% upside from its current share price. Both companies offer strong growth prospects without relying on AI advancements.
The total annual earnings for the S&P 500 are expected to grow by 20% in 2026, with all 16 Zacks sectors projected to report year-over-year earnings growth, indicating economic resilience and a favorable long-term outlook for the stock market.
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