Lower economic sentiment and mixed earnings mean many disappointed investors — but, for just as many, it means an opportunity to find tech stocks to buy on the dip. After surging in recent months, the market was widely due for a correction. We may be seeing that correction now, as top names drop post-earnings and the S&P 500 dipped 3% over the past month.
But, practically speaking, little has truly changed for these tech stocks to buy on the dip. Their core value proposition remains valid, and, in many cases, first-quarter earnings were strong but offset by lower-than-expected forecasts for future periods. However, post-earnings drops seem a bit extreme for many of these tech stocks. Extreme or not, though, one thing is certain: tech-centric investors have a veritable shopping spree for these stocks to buy on the dip.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) is an easy pick for the top tech stock to buy on the dip, considering shares slid nearly 15% after management’s spending breakdown and muted sales forecast overshadowed a 117% bump to quarterly net income. Across the board, Meta’s performance indicators were stellar for 2024’s first quarter. Highlights include higher daily active user rates, improved ad impressions, higher ad spending and more than $15 billion spent on capital return to shareholders. So why the dramatic stock drop that makes Meta the top tech stock to buy on the dip?
Most obvious was Zuckerberg’s muted revenue forecast for the second quarter. He pegged his estimate between $36 billion and $39 billion; that top-line figure represents just 18% year-over-year growth compared to Q1’s 27% increase. Also weighing on investors’ minds is a planned record-high series of capital expenditures, mostly focusing on improving Meta’s artificial intelligence position that would “grow [Meta’s] investment envelope meaningfully before [it makes] much revenue from some of these new products.”
Some may consider Zuckerberg’s varied metaverse initiatives a guide for Meta’s AI prospects, but I’d caution against turning bearish on Meta, considering the company’s long history of forward-thinking projections that take time to bear fruit.
Netflix (NFLX)
Netflix (NASDAQ:NFLX) seems to be falling from Wall Street’s wider graces, dropping more than 10% following an earnings report that showcased substantial growth and strategic positioning in tune with evolving consumer preferences. And, despite the per-share price falling, the overall number of bullish analysts jumped from 14 to 21, with only one suggesting a sell after this report.
Netflix surpassed revenue expectations and experienced a rise in subscription rates and an increase in income. Additionally, Netflix is seizing new market opportunities, highlighted by its partnership with TKO Group Holdings (NYSE:TKO) to bring live-streamed wrestling to its platform. This collaboration underscores Netflix’s commitment to being an entertainment hub rather than transitioning into sports broadcasting, though signs indicate a potential broader shift toward sports content in the future.
The stock slump seems to be due to management’s decision to stop detailing subscriber stats in 2025, which, admittedly, is strange. But, as investors, the bigger picture of how those subscribers behave and how much they spend is far more important than ever-shifting totals alone. The misalignment between per-share pricing and a standout earnings report is what makes Netflix another tech stock to buy on the dip today.
Palantir Technologies (PLTR)
Palantir Technologies (NYSE:PLTR) dipped over the past few weeks with no discernable catalyst driving shares down. Instead, it seems as though most of the losses come from general inattention and sentiment cooling after a stellar earnings report sent shares soaring. So, while not necessarily a true dip, this tech stock is down enough that shares are worth buying before the next leg upward.
That leg up may be coming sooner than expected, as some unusual options activity points to hefty expectations for the stock within the next month. While options flow isn’t the be-all-end-all, considering some trades act as a hedge or execute for other reasons, a purchase order for 17,000 call options expiring May 17th with a price target of $26.50 is definitely notable.
Either way, Palantir’s stock has historically traded within a tight band before surging, then settling at or near a new floor. For a long time, that floor hovered in the $15 range; strong earnings pushed per-share pricing to $25 before it settled into today’s roughly-$20 lower limit. If the company’s May 6th earnings report echoes past trends, today’s dip might be the last chance to buy Palantir at these prices.
On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.