The wave of AI sell-off has not stopped, which technology stock can break through? Wall Street strategists provide an answer.

In February, investors have been withdrawing from technology stocks, with concerns about artificial intelligence (AI) potentially disrupting traditional industries triggering market turmoil, causing the Nasdaq Composite Index to fall by over 4% in the past month. However, Wall Street strategists believe that there will be significant differentiation within the technology sector in the short term. "Our holdings in NVIDIA Corporation (NVDA.US) and our non-holdings in Salesforce, Inc. (CRM.US) have shown a stark contrast in their financial reports," said Nancy Tengler, CEO of Laffer Tengler Investments. Tengler believes that NVIDIA Corporation's stock price dropped by about 5% after releasing its quarterly earnings report last Wednesday, and its performance has been flat so far this year, making it a good time to buy. She pointed out that considering the investments of mega-corporations like Microsoft Corporation (MSFT.US), Meta (META.US), Amazon.com, Inc. (AMZN.US), and Alphabet Inc. Class C (GOOGL.US) to invest around $65 billion this year in building AI data centers using NVIDIA Corporation's chips, NVIDIA Corporation's current valuation still appears cheap. "We are getting signals from all supercomputer manufacturers that computing power is in short supply, and this is the source of revenue growth," Tengler explained. "One company's capital expenditure is another company's revenue sourceNVIDIA Corporation is the latter." On the other hand, regarding Salesforce, Inc., Tengler revealed that her company used to hold the stock but has since sold it all. "We don't see a growth trajectory," she said frankly. "There are better options in the market." In fact, many investors have recently begun to question whether customers of Software as a Service (SaaS) companies will switch to self-developed solutions using large model AI tools like Anthropic's Claude Code, reducing their dependence on service providers like Salesforce, Inc. More importantly, if AI enhances productivity and reduces the workforce, it will directly impact the traditional software industry's pricing model based on "per seat" subscriptions. "Software sold per seat is fundamentally linked to the job market," Tengler analyzed, "so we are choosing to focus on other areas." Economists at Goldman Sachs Group, Inc. predict that the unemployment rate will rise from 4.3% to 4.5% this year, and they note that the risks of job displacement due to the accelerated adoption of AI are increasing. Melissa Otto, research director at S&P Global Visible Alpha, said, "If in the coming years the number of software seats decreases, it is indeed worrying." She believes that the more attractive opportunities currently lie in the storage chip sectorthe core component of AI workloads, whose prices continue to soar due to supply bottlenecks. "Storage stocks have performed impressively," Otto pointed out. "Their valuations are lower, but their earnings expectations have soared, reminiscent of NVIDIA Corporation two years ago." Storage giants Micron Technology, Inc. (MU.US), Western Digital Corporation (WDC.US), South Korea's SK Hynix, and Samsung (SSNLF.US) have all risen by 60% this year. In contrast, the iShares Expanded Tech-Software Sector ETF (IGV.US) has fallen by 24% since January. In general, while strategists believe that the selling last month may have been excessive, they are generally unwilling to assert that the market has hit bottom. Analysts at Goldman Sachs Group, Inc. pointed out in a recent report that it is difficult to disprove the market's concerns about AI impacting data-intensive industries such as software, media, education, and business services in the short term. Goldman Sachs Group, Inc. analyst Ryan Hammond and his team said, "We expect that investors will either need several quarters of evidence to prove the resilience of these businesses, or their valuations will need to significantly decline compared to other market sectors before they will start buying these stocks again in a big way."