Goldman Sachs is bullish on global tech stocks: undervaluation brings buying opportunities, and they are more defensive in the Iran war

Ask AI · How does the Iran conflict enhance the defensive characteristics of the technology sector?

Cailian Press, April 7 (Editor Liu Rui) - On Tuesday, Eastern Time, Goldman Sachs stated that global technology stocks (including U.S. tech stocks) have experienced a prolonged period of poor stock performance, and currently their valuations generally appear relatively low, providing potential entry opportunities for investors.

Goldman Sachs in the report said: “(As of this year), we have witnessed the worst relative performance of the technology sector over the past 50 years.”

Since the beginning of 2025, multiple factors have continuously triggered market concerns, leading to a relatively weak performance of the entire global tech sector and prompting investors to shift toward value stocks.

These factors include the release of China’s artificial intelligence model DeepSeek, large-scale capital expenditures by U.S. mega-corporations, and market concerns triggered by AI-driven industry transformation.

Goldman Sachs believes that while investors are heavily worried, the growth momentum of the tech industry remains strong, and valuations are still low—this provides a buying opportunity for investors to enter the sector.

In the U.S. stock market, the valuation premium of mega-tech companies has decreased and is now almost the same as that of other small- and medium-sized companies in the industry; globally, the price-to-earnings ratio (PE) of the information technology (IT) sector has fallen below that of non-essential consumer goods, essential consumer goods, and industrial sectors.

Goldman Sachs stated: “The poor performance of the tech sector is also beginning to present attractive valuation opportunities for investors, as its valuations (relative to expected overall growth) are below the global market level.”

Another factor making the tech industry more attractive is the impact of the Iran war.

With the outbreak of conflict in Iran, the Strait of Hormuz remains blocked, causing significant disruptions to global oil supply, and leading major institutions to lower their expectations for global economic growth.

Goldman Sachs said: “Given that the cash flow of the tech industry is relatively less sensitive to economic growth, and that the industry can benefit from any rise in bond yields, it may perform more defensively in the coming months.”

Goldman Sachs also mentioned that despite low valuations, the profitability of the global tech industry remains strong.

Goldman Sachs stated that among the sectors of the S&P 500, the market generally expects earnings per share (EPS) of the information technology sector to grow by 44%.

Goldman Sachs said: “(The profit growth) expectations for the tech industry also surpass those of any other industry. This has led to a record high gap between (tech stocks) stock prices and actual earnings growth.”

(Cailian Press, Liu Rui)