This week’s decline in technology and AI stocks has opened the door to a number of buying opportunities, according to one popular technical indicator. Each of the major U.S. indexes had their worst day in a month on Thursday as investors continued their exodus from the market’s biggest technology stocks, reflecting concerns about rising valuations related to AI deals. The Nasdaq Composite Index rebounded on Friday, offsetting some of its earlier losses, but was still down 3.5% in November. Using the CNBC Pro stock screener, we looked for stocks in the S&P 500 that have come under sharp pressure this week and whose 14-day Relative Strength Index (RSI) has fallen so low that they are considered oversold. We found several companies, from database management software provider Oracle to french fry maker Lamb Weston Holdings. Stocks with a 14-day RSI below 30 are considered oversold and may rebound quickly. Look at the name displayed on the screen. Oracle, which also provides cloud infrastructure services, was one of the most oversold stocks with an RSI of just over 24. Oracle stock has fallen nearly 6% this week, bringing its loss since its September 10 high to about 35%. Still, the stock is up 35% this year. Oracle’s stock price has fallen recently on concerns that it is relying too much on the bond market to fund the construction of AI infrastructure deals. Bank of America on Wednesday reinstated market-weighted credit guarantees on Oracle debt and called for clearer financial policy in the capital-intensive business, following recent deterioration in the Oracle market. “We believe the recent spread underperformance reasonably discounts a long list of concerns that are likely to remain overhang in the medium term given ORCL’s early stages of building out its AI infrastructure,” analyst Tom Curcuruto said in a report, adding that positive drivers for Oracle’s growth are offset by credit negatives such as AI competition, capex uncertainty, and negative free cash flow. Super Micro Computer is a chip maker on the oversold list. The stock, which has an RSI below 27, fell 30% in November alone and is down 45% from February’s highs. Shrinking gross profit margins and first-quarter results that fell short of analysts’ profit and revenue expectations soured sentiment. Analysts covering Supermicro have mixed reviews on the stock, but their consensus price target still suggests it has nearly 23% upside potential, according to LSEG. Of the 20 analysts covering Super Micro, 2 rate the stock as a strong buy, 7 rate it as a buy, and 8 rate it as a hold. SMCI 1Y Mountain Super Microcomputer’s stock price performance over the past year. Lamb Weston, a producer and distributor of frozen potato products, is the most oversold stock on the screen with an RSI below 29. The stock has fallen 11% in the past month and is down 32% from its 52-week high hit in December as a result of weak consumer demand. But despite the stock’s underperformance, analysts polled by LSEG expect Lamb Weston could rise about 17% over the next 12 months. Lamb Weston showed progress on cost reductions in its fiscal first quarter, which ended in August, and beat analysts’ adjusted profit and revenue estimates, according to FactSet. Other oversold stocks this weekend include Molina Healthcare and Charter Communications.
