Some tech stocks that investors sold off over the past week may now be poised for a comeback, according to one popular momentum indicator. Despite Friday’s rally in the stock market, all three major U.S. indexes had a down week. The S&P 500 fell nearly 2%, slightly more than the 30-stock Dow Jones Industrial Average. Despite Nvidia’s strong quarterly results, the Nasdaq Composite Index fell 2.7% as high-flying artificial intelligence stocks lost momentum. We used the CNBC Pro stock screening tool to find stocks in the S&P 500 that sold this week, had a 14-day Relative Strength Index (RSI) below 30, and whose price charts were technically oversold. Stocks such as database management software provider Oracle, data center networking company Arista Networks and ride-sharing platform Uber Technologies rose. Take a look at the 15 most oversold stocks. Arista Networks is one of the most oversold stocks, with an RSI of 25 after falling 10.6% this week. The company’s stock price rose earlier this year on enthusiasm for networking equipment needed for AI data centers, but it fell about 26% in November alone. Investor sentiment for Arista soured after the company announced disappointing fourth-quarter sales forecasts, despite better-than-expected third-quarter results. Super Micro Computer and Oracle, once popular tech stocks, are now considered oversold as their 14-day RSI was just below 25. Oracle is down nearly 11% this week and nearly 6% on Friday alone. This is as investors continue to be concerned about the rising valuations associated with the AI name and the risks associated with debt financing and circular transactions to fund AI capital investments. Still, analysts still have a consensus buy rating on Oracle, with price targets suggesting an upside potential of more than 70%, according to LSEG. Oracle is down 43% from its September high. Uber fell 8.5% this week, a victim of the broader market weakness, with the RSI rising to 25. The stock has still outperformed the broader market this year, up 39%, and analysts surveyed by LSEG are optimistic about the upside. Earlier this month, Uber reported third-quarter adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) that were below analysts’ consensus estimates, according to FactSet. Revenues exceeded expectations. Goldman analyst Eric Sheridan, who rates Uber a buy, said in a note to clients on Thursday that “overall mobility and delivery demand remained strong in the third quarter, stronger than feared, with solid booking trends and future commentary in the fourth quarter, particularly momentum shown in delivery commerce initiatives.” “That said, from an earnings perspective, we see the narrative around medium- to long-term investing and its impact on incremental returns as a key theme that investors are likely to continue to focus on in the coming months, particularly with a focus on how the (self-driving car) landscape evolves over the next few years (both in terms of competitiveness and stimulus to the UBER network).” UBER 1Y Mountain Uber stock performance over the past year. Other stocks that are oversold and could bounce back in the near term include Humana, Palo Alto Networks, and BlackRock.
