It's a great time to buy tech stocks: 4 smart strategies to find winners in a down market

Tech stocks have taken a hit this year — but that’s actually good news for investors willing to ride out the bumps.

While market volatility might seem scary in the short term, history shows that stock markets trend upward over time. Zoom out on any major index, and the long-term growth becomes clear. That’s why downturns like the one we’re seeing now are often prime opportunities to pick up high-quality tech stocks at lower prices.

So far in 2025, the S&P 500 (SPX) is down about 5.9%, while the Roundhill Magnificent Seven ETF (MAGS) has dropped roughly 15.9%. In other words: it’s a buyer’s market — if you’re smart about it.

Of course, there are still risks to consider. Trade wars could impact tech companies, especially those selling hardware. Slower economic growth could also weigh on the broader sector. But for investors who can stomach some uncertainty, this market offers a rare chance to build a stronger tech portfolio.

How to Find Winning Tech Stocks Right Now

According to Daniel Flax, senior tech analyst at Neuberger Berman, the key is focusing on companies that continue to innovate and grow through economic cycles. Flax favors companies investing heavily in artificial intelligence and cloud infrastructure — like Nvidia (NVDA), Alphabet (GOOGL, GOOG), and Microsoft (MSFT).

“They're not immune to cyclical headwinds," Flax said. "But these companies continue creating value for customers — and that ultimately drives shareholder value too."

He added that while U.S. trade policy could shift, the major technology trends remain strong and intact.

Make Volatility Work for You

Ken Mahoney, CEO of Mahoney Asset Management, recommends staying flexible instead of picking a permanent "bull" or "bear" side. Volatility, he says, can be your best friend if you learn how to use it.

One basic tactic: Study a stock’s price chart to spot support and resistance levels — the prices where stocks tend to bounce back or retreat. For example, Mahoney pointed out that Microsoft has bounced off $350 several times this April. While the stock currently trades around $392, investors could set buy orders around $370 to catch it on a pullback, and even sell near $400 if it rallies.

“This year, tactical moves like buying dips and selling rallies will be key," Mahoney said. "Not to turn investors into day traders, but to make volatility your friend.”

He also suggests paying attention to the 200-day simple moving average (SMA). If a stock falls below its 200-day SMA, it could signal the start of a longer downtrend — a caution flag for long-term investors.

Diversify — Even Within Tech

Most people know about diversifying across different sectors. But you can also diversify inside your tech portfolio, says Mark Malek, Chief Investment Officer at Siebert.

Investors often go all-in on a hot name like Nvidia — great in a bull run, but risky when the market turns choppy. Balancing it out with more stable stocks like Microsoft can help smooth your overall returns.

One simple way to spot lower-volatility stocks? Check the beta. A beta of 1 means the stock moves in line with the market. Above 1? More volatile. Below 1? Less volatile.

Right now, Nvidia’s beta is 1.97 (high risk), while Microsoft’s is 0.92 — meaning it’s been steadier than the overall market, based on FactSet’s 90-day data.