Promising Tech Stocks for a Market Comeback in 2025

As the technology sector grapples with the effects of fluctuating market conditions, many investors are left wondering which stocks hold the potential for a comeback in 2025. After a robust performance in 2024, the sector has seen significant declines, prompting scrutiny from analysts and traders alike. This article explores the recent underperformance of the information technology sector, identifies stocks poised for recovery, and discusses key drivers influencing these potential rebounds.

The Current State of the Tech Sector

The information technology sector, having flourished in 2024, has faced a rough start to 2025, marked by a 12% decline year-to-date. This has rendered it the second-worst performer in the S&P 500, surpassed only by consumer discretionary stocks. Factors contributing to this downturn include the implications of President Donald Trump’s new trade policies, which have impacted tech companies with significant overseas exposure. Additionally, there has been a widespread selloff of high-flying tech shares as investors gravitated towards defensive sectors such as consumer staples and utilities. The combination of external pressures and cautious investor sentiment has created a challenging environment for tech stocks.

Identifying Beaten-Down Stocks with Upside Potential

Despite these headwinds, analysts are uncovering opportunities among beaten-down tech stocks that could see resurgence as the second quarter commences. CNBC Pro utilized LSEG data to identify stocks that have experienced at least a 20% decline year-to-date, maintain a consensus buy rating, and show an average price target implying at least a 20% upside. Notable mentions include:

• Arista Networks (DOWN 30%): This cloud computing provider has been added to the Analyst Focus List by JPMorgan, which highlights a growth strategy and an anticipated 50% price increase, driven by a shift towards ethernet adoption in AI data centers.
• Dell Technologies (DOWN 20%): Morgan Stanley analyst Erik Woodring reiterated a bullish outlook, with a price target indicating a 39% upside, citing the company’s focus on AI and machine learning as key priorities amidst macroeconomic volatility.

In addition to Arista and Dell, several other technology stocks are gaining attention for their growth potential. Companies such as ServiceNow, On Semiconductor, and Broadcom are also making the list based on their performance metrics and analysts’ outlook. For instance, ServiceNow has been recognized for its robust cloud services offering, which is increasingly in demand as more enterprises shift to digital solutions, while On Semiconductor is benefiting from the rising needs in automotive and industrial sectors.