Not All Tech Is Getting Crushed: 5 Names Holding Up Through the AI Sell-Off
Key Points
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Interested in Amplify Cybersecurity ETF? Here are five stocks we like better.
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While semiconductor and memory stocks have sold off sharply, cybersecurity and software names like HACK and IGV have stayed near their 52-week highs.
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Microsoft, CrowdStrike, and Palantir have shown notable resilience and relative strength, with CrowdStrike up about 120% year to date despite a recent pullback.
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Upcoming earnings from Microsoft on Oct. 28 and Palantir on Nov. 2 will test whether these resilient tech names can justify their valuations.
The past few weeks have been rough for much of the technology sector. Concerns about AI spending, lofty valuations, and new competition in the chip space have hit many tech stocks, especially semiconductor stocks, neocloud, and memory. The VanEck Semiconductor ETF (NASDAQ: SMH), for example, finished Friday, Oct. 23, more than 21% below its 52-week high and near major higher-timeframe support and its 200-day simple moving average (SMA).
The good news for bulls, though, is that it hasn’t been a one-way street across the entire tech sector. Look a little closer, and several pockets of the sector have held up surprisingly well, with a few still trading within striking distance of their 52-week and even all-time highs. Interestingly, much of that strength has come from software and cybersecurity stocks, two areas many investors had written off earlier this year as likely losers in the AI race. That narrative has flipped on its head.
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That recent outperformance and relative strength are worth paying attention to. When one corner of a sector sells off while another holds firm, it can say a lot about where capital is flowing and which groups could lead if sentiment improves. Here are five names within the technology sector that stand out.
Cybersecurity’s Basket Sits Near Its Highs
The Amplify Cybersecurity ETF (NYSEARCA: HACK) has been one of tech’s steadiest corners through the recent sell-off and turbulence. The fund is up 60% year-to-date and closed Friday less than 3% below its 52-week high. The ETF is arguably one of the purest ways to gain exposure to the broader cybersecurity industry.
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HACK holds 49 cybersecurity names. Its largest positions include Broadcom (NASDAQ: AVGO), CrowdStrike (NASDAQ: CRWD), Cisco (NASDAQ: CSCO), Palo Alto Networks (NASDAQ: PANW), and Fortinet (NASDAQ: FTNT), each at roughly 5% to 6.5% of the fund.
The bull case for cybersecurity has gotten stronger as AI spreads and gains major adoption. Every AI agent and automated workflow a company deploys opens up new access points that need protecting, and security budgets have historically been among the last to get cut when spending tightens. With a beta of 0.84, HACK has also traded with less volatility than the broader market.
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From a technical perspective, the relative strength is clear. The ETF pulled back in early October to its rising short-term key SMAs, but quickly confirmed a higher low within its uptrend. Unlike the broader technology benchmark, it is holding close to its 52-week high, above all its key SMAs. That’s a clear sign that capital has quickly flowed into this pocket of the technology sector, setting it up as a potential future leader.
Software’s Comeback Is Holding
At first glance, the iShares Expanded Tech-Software Sector ETF (BATS: IGV) doesn’t look like a standout, up only about 5% on the year. That number, though, hides how far the fund has come. IGV has rallied nearly 50% from its 52-week low and now sits roughly 6% below its high, near the top of its higher-timeframe range.
Technically, it’s shaping up for a potential breakout, too. It has spent several months consolidating near its 52-week high, with that high now acting as a potential springboard for further upward momentum and continued outperformance.
The shift in narrative has been the key driver. Earlier in the year, investors worried AI would undercut traditional software. More recently, investors seem to be recognizing that companies controlling customer data and everyday business workflows are often best positioned to sell AI on top of it. IGV’s top holdings tell the story: Palo Alto Networks, CrowdStrike, Palantir (NASDAQ: PLTR), and Microsoft (NASDAQ: MSFT) each make up roughly 8% to 9.6% of the fund, and many of those names have shown notable short-term outperformance versus the broader sector.
Microsoft Heads Into Earnings Near Its Highs
Microsoft (NASDAQ: MSFT) closed Friday at $524.51, up about 9% this year, and roughly 5% below its 52-week high. For a $3.9 trillion company in the middle of an AI-driven sell-off, that’s notable resilience.
The next big test for the mega-cap tech titan is just around the corner. Microsoft reports fiscal first-quarter 2027 results on Oct. 28, and investors will be watching closely to see whether Azure delivers on growth guidance of around 45%, alongside updates on capital spending.
The fundamentals remain strong, with net margins above 40% and projected earnings growth of 18%. Analysts have a Moderate Buy consensus from 49 analysts, with an average price target of $592.15 implying 13% upside. Still, with the stock near its highs heading into the report, the bar for a positive reaction is high.
CrowdStrike Has More Than Doubled This Year
CrowdStrike (NASDAQ: CRWD) is the standout performer of the group, up about 120% year to date. Shares have pulled back about 10% from their 52-week high of $286.99.
Friday’s action stood out in particular. The stock held its rising 50-day SMA and sharply rallied intraday to close above its 20-day SMA. That move confirmed a higher low in its steady uptrend and, from a technical perspective, further positioned the stock as a steady leader in the technology sector.
CrowdStrike is the largest holding in HACK and the second largest in IGV, so its strength helps explain both funds’ resilience. Demand for its Falcon platform has stayed sticky, and CEO George Kurtz recently warned that a fresh wave of cyberattacks is coming, a reminder that security spending tends to be driven by threats rather than the economic cycle.
One thing worth noting, though: the average analyst price target of $239.27 now sits below the current share price, a sign the stock has moved faster than Wall Street’s models. The stock’s next major known test will be its next earnings, estimated for early December.
Palantir’s Next Test Is the Numbers
Palantir Technologies (NASDAQ: PLTR) has also held up relatively well, closing Friday at $196.75. That put it up nearly 11% this year and roughly 8% below its 52-week high of $212.94. While many other retail-favorite technology names have given way to their key SMAs, PLTR has done a great job maintaining its uptrend and staying above its key moving averages.
Beyond the much-discussed stretched valuation, with a rich forward price-to-earnings of almost 150, the business has continued to impress fundamentally. Palantir generates net margins of about 49%, and analysts project earnings growth of nearly 46% over the next year.
It recently announced a new partnership with Knox Systems that expands its reach in government technology. However, the valuation absolutely remains the main debate. At more than 100 times sales, the stock leaves little room for disappointment, and the average price target of $203.48 implies only about 3% upside. With third-quarter earnings due around Nov. 2, the results will need to justify the premium.
A Divergence Worth Watching
Taken together, these five suggest the recent sell-off has been more of a rotation within technology than a wholesale exit from it. Chips and memory have taken the brunt of AI fears, while many mega-cap software and cybersecurity names have held up near their highs.
That doesn’t make these names immune. CrowdStrike and Palantir already trade near or above their average analyst targets, and earnings from Microsoft on Oct. 28 and Palantir on Nov. 2 will be key tests. But if fears around AI valuations and spending ease, the groups that held up best under pressure may be best positioned to lead the next move higher.
The article “Not All Tech Is Getting Crushed: 5 Names Holding Up Through the AI Sell-Off” was originally published by MarketBeat.