Wells Fargo Says Tech Still Looks Compelling – and Suggests 2 Stocks to Buy
We’ve been on something of a roller coaster this year. After a sharp selloff into late March as tensions in the Middle East escalated, stocks staged a strong comeback. The S&P 500 surged back to record highs, climbing more than 10% from its lows, while the tech-heavy Nasdaq also logged one of its strongest runs in decades.
That rebound has been fueled by improving expectations around the war in the Middle East – particularly hopes for a ceasefire and reduced pressure on oil prices – which helped flip sentiment back toward risk assets.
Yet, the situation remains fluid, with periodic flare-ups and ceasefire deadlines continuing to inject volatility into the market.
The natural move for investors in such an environment is to gravitate toward defensive plays, but Wells Fargo strategist Mason Mendez suggests a more nuanced approach: recalibrate the portfolio based on which investments are best positioned under current conditions. His conclusion – it may be time to revisit tech.
“Diversification is a standard feature of our guidance for long-term investors,” Mendez says, “but that does not mean ‘buy it and forget it.’ Like a garden, we believe a portfolio can benefit from occasional maintenance, typically in the form of rebalancing: the practice of reallocating from securities whose valuations we think are too high to those we find potentially more attractive… Valuations for the Tech sector have come down meaningfully and are now in line with the broader S&P 500 when looking at the forward (next 12 months) price-to-earnings ratio. Despite the price weakness, however, we believe Tech continues to exhibit strong earnings growth potential.”
Putting this into active suggestions, Well Fargo’s analysts are suggesting two stocks to buy now, while valuations look compelling. Both stand in the tech field, but spring from different roots. Do other analysts on the Street agree with their picks? We used the TipRanks database to find out.
Advanced Micro Devices (AMD)
We’ll start in the world of semiconductors, where AMD is a fast-growing mega-cap – but oddly, even with its $421 billion market cap, AMD is ‘small’ when compared to its trillion-dollar industry leaders. But the company is rising, finding support from the rapid expansion of AI. Shares in AMD are up 28% so far this year, and 221% over the past twelve months.
Those gains are rooted in the company’s clear knowledge of what the market needs and what AMD can provide. The company has put together what it describes as a ‘comprehensive AI portfolio,’ with GPUs and CPUs for data center deployment; APUs and SoCs for Edge AI; and even AI-capable PC products, allowing users to operate advanced AI models at the desktop without losing performance. AMD has seen high demand for its EPYC CPUs and its Instinct GPU in particular, and that demand has driven its recent success.
This can be seen in the simple fact that data center revenue, at $5.4 billion, makes up just over half of AMD’s total revenue stream. Data centers are closely tied to AI, and AMD is making itself indispensable to both. Google Cloud, Microsoft, Dell, Oracle, AWS – some of the industry’s biggest names are working with AMD products.
In its last set of financial results, covering 4Q25, AMD reported $10.3 billion in total revenue. That total was up almost 34% year-over-year, and it beat the forecast by $600 million – an impressive performance. The company’s net income came to $2.5 billion, a record, and the diluted EPS came in at $1.53 – also a record. We should note that the EPS figure was 21 cents per share better than expected.
For Wells Fargo analyst Aaron Rakers, who is rated by TipRanks at the top 1% of Wall Street’s analysts, the keys here are AMD’s ability to keep generating upside and its partnerships with major AI players. He writes, “We’re increasingly constructive on AMD EPYC server CPU upside potential. We currently model AMD’s server CPU revenue at +29% y/y in 2026; however, we see increasing evidence of upside to 40%+ y/ y growth—driven by continued strong cloud demand + market share gain momentum. We see AMD’s upcoming intro of their next-gen Zen 6-based Turin EPYC CPUs as a positive catalyst; strong (expanding) competitive positioning vs. Intel’s next-gen Xeon Diamond Rapids CPUs.”
Looking ahead, Rakers adds, “Following OpenAI + Meta strategic agreement announcements (material deployments commencing in 4Q26), we believe AMD will announce additional GW-scale deployments. We continue to model AMD’s Data Center GPU revenue at $13.5B and $32.3B in 2026 and 2027, respectively; believe additional announcements will support an upside path to $40B+ into 2027.”
The 5-star analyst quantifies his stance with an Overweight (Buy) rating, and a $345 price target that implies a one-year upside potential of 25.5%. (To watch Rakers’ track record, click here)
The Moderate Buy consensus rating on AMD is based on 28 recent analyst reviews that include 20 Buys and 8 Holds. The shares are trading for $274.95, and the $287.33 average price target indicates room for modest upside of 4.5%. (See AMD stock forecast)
ServiceNow (NOW)
The next stock we’ll look at is a cloud computing firm, with a focus on business software and AI. ServiceNow describes itself as providing an ‘AI control tower’ for business reinvention – that sounds like a mouthful, but in practice it means that it provides a unified platform that can integrate AI, data, and workflows to solve IT problems before they materialize.
At the operational level, ServiceNow offers products for IT service and operations management, HR service delivery, autonomous workforce governance, agentic AI, workflow data control, customer service management – this is only the tip of the iceberg. If something can be managed digitally in a business, chances are ServiceNow has a system or an AI that can do the job. ServiceNow was founded in 2003, and has been applying itself to workforce and data management for over two decades. The addition of AI to the mix streamlines the system, and makes data work for actual people.
The company’s AI Platform is designed to let client organizations work with greater speed and security by connecting everything on a single, trusted system. The use of AI agents makes the system scalable, and lets users automate complex workflows for greater efficiency. And most importantly, the platform gives users full visibility – this isn’t just AI, it’s AI with human oversight.
Despite boasting deep AI abilities, ServiceNow’s stock has been falling recently, suffering from the headwinds that have been buffeting the software sector, in particular concerns around AI labs’ potential to disrupt the SaaS space. The shares are down 34% in the past year.
At the same time, the company’s revenues and earnings have been on an upward trend. In the 4Q25 results, the last reported, ServiceNow’s revenue hit $3.57 billion, beating the forecast by almost $39 million and growing over 20% year-over-year. The key metric of subscription revenue was listed at $3.47 billion, up 21% from the prior-year period. The company’s bottom line, reported as a non-GAAP EPS of 92 cents, was 3 cents per share better than had been expected. ServiceNow will report Q1 earnings tomorrow after the close (April 22).
This stock has caught the eye of Wells Fargo’s Michael Turrin, who writes, “While 1Q is less consequential for NOW (enterprise bookings activity heavily weighted towards 2H, not 1H), pipeline commentary from our checks was notably upbeat. AI consumption is beginning to ramp, with potential 2H26 impact. NOW continues to augment AI offers with targeted M&A, with platform approach positively viewed by field… View upcoming Knowledge conf & investor day likely a greater catalyst for shares.”
Turrin lays out a sound case for buying in, saying of the company’s immediate prospects, “Our updated $185 PT (was $225, lowered on multiples given compression across the space) is derived from ~27.5x EV/FCF on our Fwd NTM estimates (implies ~10x EV/S), below historical levels, but still above peers in large-cap software reflecting NOW’s profile as one of the best growth assets in enterprise software.”
These comments back up the analyst’s Overweight (i.e., Buy) rating, while his stated $185 price target suggests a gain of 85.5%. (To watch Turrin’s track record, click here)
ServiceNow has a Strong Buy rating from the Street’s consensus, based on 35 analyst reviews that include 30 to Buy, 4 to Hold, and 1 to Sell. The stock is currently trading for $99.72 and has an average price target of $165.69, implying a one-year upside of 66%. (See NOW stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.