Tech investors reassess AI leaders

After an AI-fueled surge in recent years, 2026 has opened with weakness across leading technology names. As of March 18, all of the "Magnificent Seven" stocks and the tech‑heavy Nasdaq Composite were down year to date, pressuring valuations even for companies viewed as central to the AI theme.

This pullback has coincided with rising skepticism over heavy capital spending on AI infrastructure and concerns about how new AI tools may disrupt established software providers. At the same time, some long‑term investors see the decline as an opportunity to buy into high‑quality franchises at lower prices.

Microsoft (MSFT) is now the least expensive Magnificent Seven member on a price‑to‑earnings basis, trading at a multiple of about 25, its lowest valuation since the depths of the 2022 bear market. The stock has been flat over the past year despite recent declines.

The company faces what has been described as a perfect storm. Roughly 45% of its $625 billion backlog is tied to its close partnership with OpenAI, raising questions about that revenue stream. Investor concerns have been amplified by broader selling in AI stocks amid massive capital expenditures.

Microsoft (MSFT) spent $49 billion on capex in the first half of fiscal 2026, putting it on pace for about $100 billion for the year. However, it held $89 billion in liquidity and generated more than $97 billion in free cash flow over the prior 12 months, indicating capacity to fund these investments while revenue and net income continue to grow at double‑digit rates.

Salesforce (CRM) shares are down about 23% in 2026 as investors question its ability to maintain historic growth in the face of AI competition. The company reported 10% year‑over‑year revenue growth in its latest fiscal year and remains deeply embedded in corporate workflows, which management views as a competitive edge.

Signaling confidence, Salesforce (CRM) announced a $50 billion stock buyback in February and a $25 billion accelerated share repurchase program on March 16. The stock trades well below its average valuation of the past decade, according to the coverage.

Adobe (ADBE) has lost nearly a quarter of its value year to date amid worries that AI‑enabled rivals such as Figma and Canva could erode demand for its professional creative tools. In response, Adobe is emphasizing AI features, reporting that AI‑first annual recurring revenue more than tripled in its latest quarter.

Adobe (ADBE) is also partnering with Nvidia (NVDA) to use its advanced computing technology and is trading at about 10.6 times projected earnings for the next 12 months, close to its lowest forward P/E as a public company.

Advanced Micro Devices (AMD) is highlighted in separate bullish commentary as evolving from a chip vendor into a full‑stack AI infrastructure platform. Its EPYC CPUs and Instinct MI300/MI350 GPUs underpin a system‑level data center strategy, supported by its ROCm software stack.

One investor recently increased personal holdings in AMD after a share pullback, citing GPU deals with OpenAI and Meta Platforms (META) that include large purchase commitments and stock warrants contingent on GPU deliveries and future share‑price thresholds. The arrangements also push wider adoption of ROCm in customer data centers.

The same investor sees particular upside in AMD’s data center CPU opportunity, arguing that the rise of agentic AI could increase demand for high‑performance CPUs relative to GPUs in AI data centers.

ServiceNow is described as a software‑as‑a‑service provider whose platform is tightly integrated into customer workflows. Despite a sector‑wide sell‑off on AI disruption fears, the company continues to grow revenue above 20% annually and is expanding its AI offerings.

ServiceNow’s generative AI suite, Now Assist, reached $600 million in annual contract value last quarter and is projected by that investor to exceed $1 billion by year‑end. The firm is also developing an AI Control Tower to help orchestrate agentic AI and has acquired Armis and Veza to strengthen security capabilities.

Pinterest (PINS) is cited as another tech name drawing new capital. The company faces criticism for its exposure to home decor and reliance on large retail advertisers, but still delivered 14% revenue growth last quarter.

AI underpins Pinterest’s (PINS) push to become a shopping discovery platform, including multimodal search, virtual try‑on features, personalized curation and an AI shopping assistant, as well as improved ad targeting. The stock’s forward P/E is described as about 11 based on 2026 estimates and below 8.5 on 2027 estimates.

Activist investor Elliott Investment Management recently bought $1 billion in convertible notes to support an accelerated share repurchase and ongoing buybacks at Pinterest, reflecting confidence in the company’s strategy at current prices.