3 Tech Stocks You'll Wish You Bought on This Dip (One Is Down 22% Today)

[00:00:00] Speaker 1: The week closed with a major tech sell-off, but here are three names to buy on the dip for some long-term gains. Joining us today is MarketBeat analyst Chris Markodge. Chris, you are watching this tech sell-off, and you've got three names that all had really incredible earnings and have those long-term fundamentals to look at while the market is going a little bit crazy right now. There's a lot of red in big tech right now. What's behind that? [00:00:24] Chris Markodge: Well, there's a couple of reasons that are being thrown out. One is the simple fact that there's a sector rotation going on right now. Some tech names have gotten very frothy in the last month or so, and some investors may be looking for better options among the Dow components because the Dow actually has had a pretty good week. And then there's another line of thinking that says you've just got some institutional investors that are trying to raise capital for the SpaceX IPO, which is at the end of next week, June 12th. And so therefore, what are they doing? They're selling the stocks that are the most liquid. So they're looking at stocks like Palantir's down a little bit this week. And you've got some of the other names that have been kind of frothy in the chip space that are selling off a little bit. Why? Because that's where institutional investors can get liquidity. I'm not thinking that this is a repudiation of the AI theme or a reason for investors to question or not whether or not that has legs. I think right now there's just a lot of things going on at the same time. And I think it's a time for patience and perhaps some good dip buying. [00:01:30] Speaker 1: Yeah, there's some major dips happening right now. Again, we've had such a run up in the last couple of weeks. So this is a big turnaround for the bull run that we've really been on in a lot of the tech stocks. As some of the names you're going to see today have had a really strong bull run over the last month, but then just in the last couple of days pulling back 10% or more. So is it time to buy the dip or are these just good ones to add to your watch list in case this dip runs longer? We're going to get into that with all three of these names today. Chris, I do have one other question on the broader market to talk about. Today we're talking about the dip that we've seen just over the last 48 hours or so. But I want to talk about the run up and the rally that we saw for almost a month. What led to that [00:02:07] Chris Markodge: and why are we seeing that turnaround right now? What led to that is earnings. Earnings are always the signal and it's always the reason why these stocks go up. So at the end of April, we saw the MAG7 names report. They refuted that narrative that said data center demand was slowing down, hyperscaler growth was going to slow down. And then what happened? You saw some of the other companies that were the customers of these hyperscalers confirm the fact that that spending was actually happening. That's what built throughout the month of May. And that may start to slow a little bit now. Instead of selling May and go away, we might now be just getting into that little bit of the, okay, now we're getting into summer and we might get into that seasonality where volume is a little lower. Yeah. And with these [00:02:50] Speaker 1: earnings reports, even though we did see some very strong earnings reports come out, especially the three stocks that we're going to talk about today, all had very strong earnings and yet we're still seeing that pullback after a strong report. So we'll dive into that a little bit too. There's a lot to cover in these three stocks. 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To find out how much you can earn, download the free upside app and use promo code MARKETBEAT to get an extra 25 cents back for every gallon on your first tank of gas. All right, Chris, let's get to your list today. What is the first name that you are looking [00:04:11] Chris Markodge: to buy on this tech dip this week? Yeah, so the first name that I would be looking at would be Broadcom, ticker symbol is AVGO. I want to start here because the setup's kind of counterintuitive. The company had a great quarter, actually. They reported record revenue of around $22.2 billion. These were really strong numbers, and the stock got crushed. It went down like over 12% on the day of earnings. I think it's still down around 10% today, so it hasn't really come back a lot. And I think really a lot of that is just that, you know, there were expectations. Let's just say the goalposts moved a little bit. People said, okay, well, we were expecting a really strong report, and we only got a strong report. We were expecting really strong guidance, and we only got basically a confirmation of their prior guidance. So I think that's really what you saw, and therefore there was [00:05:03] Speaker 1: just a little bit of a sell-off in the stock. Yeah, let's talk about that expectations. I feel like we're seeing that more and more in the tech sector. NVIDIA was the first one where we saw the expectations were just so strong on huge companies like NVIDIA that even when they have a huge beat and a great earnings report, a lot of that was already priced in. Is that the case for Broadcom? I mean, we saw the stock rally quite a bit before this pullback. Was the market already pricing in? Any kind of earnings success that they did show in this report? [00:05:31] Chris Markodge: I think that's exactly the case. I mean, so think about this. Even after the pullback that we just had, the stock's still up 53% in the last 12 months. So it's not like investors haven't done very well if they got into this stock. And I think right now what you're seeing is an opportunity for investors who maybe were sitting out that pass rally. This might be a time to dip your toe in, start accumulating. You don't necessarily have to go all in at this point, but it's a good idea to maybe take a second look at this stock while we're in the summer months and while you may have a chance to accumulate while maybe market volume isn't that intense and you're not going to see maybe the extreme movements in the stock that you saw leading into earnings. [00:06:16] Speaker 1: If you were looking at this stock and what's happening in the market right now, do you see this as the beginning of maybe a summer pullback in this stock? Or what do you think the future could hold for this stock right now? [00:06:27] Chris Markodge: What's interesting to me is that the stock has pulled back right to about its 50-day moving average. But having said that, the 50-day moving average is still on the rise. So that means that the momentum is still in favor of the stock going higher. So right now, this 50-day moving average and the stock pulling back to that level signifies this could be a nice buying signal if the stock can hold at this level. If the stock dips below that level, there really isn't much to stop the stock from going down to, I'm looking at maybe 360. And then below that, it could even start getting down closer to 300 if it doesn't hold at the 50-day moving average. So there is the potential for the stock to dip lower. But right now, I think this is a pretty good indication of you've got a 50-day moving average that's still moving higher and the stock that's bouncing down to that. So if I'm an investor, I'm looking to see if it holds support at that level that can make this the time to buy. Otherwise, you may just want to let the stock drift a little lower because according to the relative strength index, it's really kind of neutral. It's neither overbought nor oversold at this level. So there's a range of outcomes that could happen, but it's kind of interesting to me that as we're talking about this, the stock's sitting right about that crucial level. [00:07:47] Speaker 1: It's a crucial point for the stock and it could go many different directions, as you said. But I think that the main thesis here for retail investors to consider if they're looking at adding more of Broadcom to their portfolio or adding it for the first time is what is the long-term case? Whatever entry point you end up getting on this, what's the long-term case for growth for this one? [00:08:04] Chris Markodge: Chip stocks have always tended to be those cyclical stocks, but right now we're in a cycle that we've just never had, we've never seen this before. We've seen it where there's innovations coming out of the chip sector all the time. And you have a company like NVIDIA that introduces a Blackwell chip one month and now they're already talking about the next generation of that beyond that. So there's just so much demand and so much demand not only for the products themselves, but for innovation. That's really the story here for Broadcom. And keep in mind, although we're in a market where maybe fundamentals don't really matter to some investors, this is a stock that's still trading at a nice discount to a lot of the chip stocks itself, even with the stock getting as frothy as it did. [00:08:50] Speaker 1: Yeah. The valuation is going to be coming up in a few of the stocks that we're going to talk about today because of how much of a run-up a lot of these tech stocks have seen. That's the big question, but this one is pretty good when compared to the rest of the stocks in the tech sector. So a good discussion on good first stock here, Chris. Let's move on to the second name that you are looking as a buy during this tech dip this week. [00:09:10] Chris Markodge: I'm looking at Palo Alto networks. Here, we're getting into the area of cybersecurity. You could pick a lot of names in this sector. There are a lot of names to choose from. I'm looking at Palo Alto because they're just one of the big names. They're one of the leaders in the space. And I think it's just one of the stocks that's going to tend to do well, especially if you're maybe a little bit, you know, if you have a little bit lower risk tolerance, I think this is a good name to buy. The company had good earnings, but stocks pulled back a little bit. It's still up about 50% in the last month. It's up about 70% in the last three months. So cybersecurity stocks were making a comeback as this idea of the SaaS-pocalypse, I think is those fears are fading. And people are realizing that in a world of not only AI, but agentic AI, the need for cybersecurity is more important than ever. And you're really not going to be able to get around partnering with one of these companies that have the ability to address all of your cybersecurity needs. And that's one area where Palo Alto comes in. [00:10:11] Speaker 1: Yeah. In the last month or so, I feel like Palo Alto is one of several cybersecurity stocks that had been punished during the whole software story that you were talking about. And we've just seen so many of these stocks, this whole group of stocks really skyrocket in the last month. So it's been a great month for shareholders who already own these stocks. But is this enough of a pullback to look at getting into a stock that's seen such a big climb in a short window? I think that's the one concern to look at here. I mean, we're not quite to the all-time highs, but we're getting pretty close to that. Is this a concerning time to look at adding this? Or how much of a pullback would you want to see before getting [00:10:45] Chris Markodge: into a name like Palo Alto right now? Yeah, I'd want to be a little bit careful here. The stock just hit an all-time high last week right before earnings. And you saw that pattern that we've seen with a lot of stocks. It's that hockey stick move higher. I'm not saying that it was without reason. I mean, cybersecurity is sort of a catch-up trade right now. Those stocks have been sold off pretty brutally. We know that. And so there could be that sense of investors are trying to pile back into these. But we, again, we have the SpaceX IPO coming out next week. And I brought up at the beginning of the video, you've got some institutional investors that may be trying to reposition their portfolios to raise cash for that. You've got a summer season that tends to be less active from a trading standpoint. I might let this one kind of marinate a little bit, see how far it can drift lower. It's trading well above its 50-day moving average, even though that 50-day moving average is on the climb. As we're taping this, Bridget, the stock is here today on Friday. It's trading at around 276. I wouldn't hate seeing it pull back to around 260, 250, and think that might be a nice point to start thinking about jumping back in. If it gets below 250, you could start seeing 240 even down into the 215 range get into play based on the sharp price movement we've seen. But it would be maybe more likely than less that you're still going to see this one pull back just a little bit more. Again, it's just had such an incredible run over the last three months. It might be due for a little bit of a pullback. [00:12:19] Speaker 1: Yeah, more of a pullback even than we're seeing right now. But let's talk about why this is making your list of tech stocks to watch on the dip. Even though this is a small dip right now, it maybe could become more of a dip in the next few weeks. But let's talk about long-term. Why is this one one that you're watching? And let's also talk about what came out in that earnings report. I know they had a recent acquisition. That's something that the company CEO talked a little bit about in that call this week, last week. Let's talk about those long-term positive signs that this one is going to give you some good returns over time, no matter where you get into it. [00:12:51] Chris Markodge: The CEO, Nikesh Arora, had a nice little line. He said that this idea of the Saks apocalypse was cyber dead, as he called it. It's a nice line, but the question is, can the company back it up? And I think Palo Alto, that's where the story is interesting. You're looking at metrics like annual recurring revenue. And in this case, looking at what the company is projecting for next generation security, ARR. In the quarter, it grew 60%. It was up to about $88 billion. They have a 120% net retention rate. That means that not only are you seeing customers are increasing their spending with Palo Alto, but they're also spending more. That's a really good combination. You have consumers that are staying and they're spending more on the platform. They raise their guidance. They're generating strong free cash flow. I think this is a story that's just beginning. Again, the question for investors is what price do they want to get in on that stock for? And I might be saying, let's look for a little bit more of a pullback before you dive in. And again, summer may be the good opportunity to do that because a lot of these stocks can tend to just kind of chop around in the summer without a firm [00:14:01] Speaker 1: catalyst one way or the other. Yeah, let's talk about catalysts for this one too. I know this is also one that should have a really strong second half of the year. Why is that? Are there certain catalysts coming for this company that you think will continue to see more growth in the next couple [00:14:14] Chris Markodge: of earnings reports coming down the line? Yeah, I think it really just comes down to the company's guidance. I mean, the company is telling you they're going to have a strong second half of the year. And that's a pretty bold statement to make if you don't think you can back it up. I mean, if I'm one of these companies right now, I don't want to make a statement like that if I don't think I can back it up, look at what we just talked about with Broadcom. They said, yeah, they reiterated their guidance. They didn't necessarily go raise their guidance. So I think that really tells you when you have a company like Palo Alto that's actually raising their guidance and raising their outlook, that sends a strong message to investors. I think that's a great point, Chris. I think that they [00:14:50] Speaker 1: wouldn't say they're going to do better unless they have something to back it up. So I think this is a good one to watch. The whole sector, that cybersecurity sector, is a really good one to watch right now. This last stock you have for us might be the biggest sector to watch in this whole tech story, especially at the little pullback that we're seeing. And I'm going to preview it. We're getting into the space sector. And I know you mentioned earlier on the SpaceX story has every investor, even the institutions, excited to get into this IPO next week. If you are looking at space stocks, this is a wild time to look at space stocks. But some of these names, like the one we're about to get to are starting to pull back a little bit, you can check out this list of the seven best space stocks to look at for 2026. You can scan the QR code or click the link in the description. This is a free report by a MarketBeat analyst, and it has a lot of really interesting names that all have wild stock charts right now, too. So take a look at that list for free right now on marketbeat.com. All right, Chris, let's get into this last stock that you are looking at as a buy the dip opportunity after a [00:15:49] Chris Markodge: pullback this week. We're using the word pullback, and that might be an understatement. This is bordering on a full-blown correction. I'm talking about Planet Labs. This is a stock that had a strong earnings report just last night on June 4th. Nothing really wrong with the earnings report. The earnings report came in solidly. Revenue was up, I think, 42% year over year. The company's not profitable, and it wasn't profitable this quarter, but the loss was in line with expectations. So there was really nothing wrong with the earnings report except for the fact that, yeah, it's coming out at the same time that SpaceX is getting ready to launch, and the stock was up over 900% in the last year, and the stock was already pulling back going into the earnings report, and the stock's down 22% today. So that's your story right now. But I think that presents investors with a nice opportunity. If they hadn't been in the stock before, this may be the time to be getting a second look at a very attractive stock in the space sector, and if for no other reason than they also have a little bit of a relationship and they do [00:17:00] Speaker 1: business with SpaceX. Yeah, which is a huge catalyst for any of these names right now. I'm going to talk about that long-term thesis in just a minute, but I do want to talk about the elephant in the room for this one, and that's with how much it's grown in the last year. Again, roughly up a thousand percent in a year. The big question with this one and many of the space companies is, let's look at the valuation right now. Is this just outrageous to be thinking about investing in the stock with valuation and numbers? We can't even talk about price to earnings because it's not a profitable company yet. So let's just talk about valuation, concerns with this one, even with the big correction that I'd seen this week. As you said, we can't really, we're not [00:17:36] Chris Markodge: talking about price to earnings because we're not talking about a company that's profitable yet. You look at their price to sales ratio, you look at their price to book ratio, and those numbers are, you know, those numbers are extremely high. The one caveat I would say, because I want to be consistent on this, I've been consistently saying with a company like Palantir that you have to be, you have to be concerned about using conventional valuation metrics on companies that are essentially digitally native and those metrics may not apply. And I think the same might be true here of Planet Labs. I'm not saying at all that investors should completely ignore the fact that this company is not profitable. This company has made a huge run prior to being profitable. That wasn't the case with a company like Palantir. Palantir kind of chopped around and then it really took off once the company showed that it was becoming profitable. So I'm not saying that the profit, the lack of profit doesn't matter, but I am saying that I don't think when you're looking at a company that's in a fast growing sector like the space sector, I think you have to take the valuation with a little bit of a grain of salt and say, let's look at what else is going on. And I think when I look at the earnings report, Bridget, I just see a stock that was, as I've said, and it's not a joke. This was a stock that was up over 900% in the year. So to say it was due for a pullback, yeah, it was due for a pullback. [00:19:10] Speaker 1: Due for a pullback, and it is absolutely pulling back right now, but has it pulled back enough to make sense for investors to get in right now and still profit long term? Let's cover both of those questions right now. Just talking about long term, why do you think this one has the chance to actually turn profitable and bring a nice return for investors? And also, is now a time to get in, or do you think that this fall is just the start of a bigger correction for this name? [00:19:35] Chris Markodge: The company's earnings report, there was really nothing wrong with the earnings report. The company uses a subscription model. They have a heavy revenue mix in the government sector, but that's not necessarily a problem right now. They're getting revenue from not just the United States, but they're also getting money contracts with the European Space Agency. Again, I don't think there's anything wrong fundamentally with the company. It's that I think the stock got overheated. Investors want what they want, and in this case, they can bid up a stock to a level that is extreme, and I think that's what happened, and that's where I think the opportunity lies. I found this very interesting, Bridget. I saw the stock down 22%, and I just almost had a laugh. I was like, oh my gosh, the stock's on 22%. But then I looked at the analyst forecasts, and you've had Wedbush and Needham both come out just this morning with price targets of over $50, or at least $50. Wow. And the stock was trading at right around $50 right before it started selling off, heading into earnings, and now you're seeing analysts that are pushing back and saying, no, that $50 is probably a fair price. Now, that's over maybe the next 12 months. They're suggesting that maybe that $50 price target wasn't that outrageous. It just might have gotten there a little bit too fast. Yeah, I think that's an interesting thing to [00:21:01] Speaker 1: see analyst price targets catching up with a stock that's grown this much. That is one thing to look at, because like you already mentioned, the Palantir comparison. Analyst price targets rarely ever caught up with the growth of the Palantir stock, but to see them catching up, they are clearly seeing something in the contract, something in the future demand for what Planet Labs is operating. I think that that is something that investors looking at these space stocks should really look at, is whether the concept that they have is going to be profitable. Because like you said, there's so much attention on this sector right now. There's a space frenzy happening in the market. So we saw all of these stocks have the same kind of giant climb like Planet Labs saw. But Planet Labs seems to have a unique position in the space sector. We're not talking about a company that's going to be working with SpaceX on these big future off plans that are a long ways in the distance. I think what they're currently offering and what they've already built the network to actually have a product that people can use on [00:21:57] Chris Markodge: the ground, right? They operate a constellation of satellites with the mission of imaging every point on Earth every single day. The contracts that they're working with are, they're selling their data to ag companies, to defense contractors, to governments, to commercial clients. So anybody who needs situational awareness at a global scale is a potential customer from Planet Labs. And again, like I said before, it's a subscription model. And so it has a durability that maybe some of these space stocks don't have yet. And I think that's what you're seeing with analysts. They're just seeing this idea of the market for this is not going to get smaller. It's probably only going to get bigger. We can have a separate conversation about the data is only as good as the people that are looking at the data, but I think the reality is we are very data dependent. We can't have enough data. So Planet Labs is providing that. [00:22:50] Speaker 1: I think this is a really interesting one to look at in the space economy right now, especially with the pullback that it's seen. Because again, I feel like this one's just an earlier name for profitability in the space sector than some of the other ones that are getting a lot of attention right now. So a great one to look at on a massive pullback. And if you want to hear some other names that you should be looking at this summer, make sure to watch this video with Thomas Hughes. He has a list of five stocks to buy before summer ends. They all have major catalysts ahead. If you missed the interview, watch the full thing here.