Twenty technology stocks have entered bear market territory, with declines ranging from 22% to 65% from their respective highs. The selloff spans AI infrastructure, semiconductors, software and crypto-linked companies, raising questions about whether beaten-down technology ETFs are approaching attractive entry points.
AppLovin Corp. (APP) leads the declines at 65%, followed by CoreWeave Inc. (CRWV), down 57%, and Coinbase Global Inc. (COIN), down 56%. Western Digital Corp. (WDC) has fallen 52%, Oracle Corp. (ORCL) 50%, and Arm Holdings PLC (ARM) 49%, The Kobeissi Letter pointed out in a post on X.
For ETF investors, the question is whether the selloff presents a buying opportunity or signals deeper problems with the AI trade.
IGV Shows the Clearest Technical Setup
The iShares Expanded Tech-Software Sector ETF's (BATS:IGV) current price of $108.10 is positioned 1.4% above a key technical level, suggesting a potential area of support around $106.64. If the ETF continues to decline, this level may attract buying interest, providing a cushion against further losses.
On the upside, the recent high of $117.76 from the past year serves as a significant resistance point. A move back towards this level would require strong bullish momentum, particularly in light of the recent downward pressure, according to market data analysis.
IGV volume reached 1.7 million shares early in Thursday's session.
Its 14-day Relative Strength Index (RSI) stood at 59.5, below the conventional overbought threshold of 70. These readings suggest a constructive trend, although a sustained breakout would provide stronger confirmation.
AIQ Needs Stronger Confirmation
The Global X Artificial Intelligence & Technology ETF (NASDAQ:AIQ) shares were down 2.44% at $62.83 at the time of publication on Thursday, according to market data. The current price is positioned 2.3% below the recent short-term average, indicating a potential bearish sentiment in the market as traders may be reacting to broader economic indicators or sector-specific news.
The ETF has, however, shown resilience, remaining 7.5% above its longer-term average, suggesting that while there may be short-term volatility, the overall trend has been positive in the longer run. The 52-week range of $44.46 to $70.26 highlights the significant fluctuations in price, with the current level reflecting a pullback from recent highs.
Its RSI was around 51.25, while its MACD remained negative, suggesting a possible early recovery rather than a confirmed bullish reversal. A sustained move above $65.50 alongside improving momentum would strengthen the case.
SOXX Has Strong Momentum, But Timing Matters
The iShares PHLX SOX Semiconductor Sector Index Fund (NASDAQ:SOXX) shares were down 1.49% at $514.17 at the time of publication on Thursday, according to market data.
The current price is situated 3.1% below a key resistance level, indicating a potential struggle to regain upward momentum. Conversely, it remains 8.4% above a significant support level, suggesting that there is still a buffer against deeper declines in the near term.
Are These ETFs a Buy?
The broad selloff highlights risks across the AI investment chain, from infrastructure spending to software valuations. IGV currently has the most constructive technical profile, AIQ needs confirmation of a recovery, and SOXX warrants caution if momentum remains stretched.
None is a confirmed bargain. Investors should look for sustained price strength, improving earnings expectations and valuations that justify future growth before treating the downturn as a buying opportunity.
