Over 25% of the Stocks in the S&P 500 Are Down 40% or More. 4 Bargain Tech Stocks to Buy Now

With the S&P 500 near record highs, more than 25% of its stocks were down at least 40% from their highs as of Oct. 8, 2026; the article identifies Netflix, Oracle, ServiceNow and AppLovin as potential bargains. It cites Oracle's $664 billion backlog at the end of Q2, while noting its debt and cash burn; AppLovin reported revenue growth of 53% to $1.9 billion and adjusted EPS growth of 66% to $3.76 last quarter, and guided to 46%-48% Q3 revenue growth. The stock recommendations are bullish but carry company-specific risks, including slowing Netflix growth, Oracle's leverage and competition facing AppLovin.

Analysis

The “down 40%” screen is a starting point, not a valuation signal: the key distinction is whether earnings power is intact or estimates have not yet absorbed higher investment, weaker ad returns, or AI-driven displacement. Analyst-based multiples are especially fragile where the business model is changing.

APP has the clearest near-term operating leverage, but the thesis depends on repeatable advertiser returns outside gaming—not just rapid revenue growth. A deterioration in campaign performance could compress both estimates and the multiple; growth in consumer advertising is a catalyst only if it converts into durable spend and cash generation. Unity’s competitive pressure is therefore a useful read-through, not proof that APP’s economics are impaired.

ORCL offers the most asymmetric upside and balance-sheet risk. Backlog matters only to the extent it converts into revenue and cash after chip, power, and data-center investment. Financing structures that shift asset ownership can support deployment but may obscure the all-in cost and cash obligations. The key 1–3 month evidence is capex, operating cash flow, and backlog conversion; structurally, funding costs or delayed customer deployments could turn growth into a return-on-capital problem.

NOW’s potential value is control and governance across heterogeneous agents, but orchestration leadership is not assured: cloud and enterprise-software vendors can bundle competing controls. Watch customer adoption and monetization rather than product announcements. NFLX’s ad opportunity is similarly conditional on measurable ad yield and advertiser retention; pricing power can support the base case, but not by itself validate an advertising-led rerating. Near term, this is a selective-watchlist setup, not a reason to buy every drawdown.

Key Decisions for Investors

• Consider a small APP-versus-U relative-value position only if subsequent results confirm strong advertiser returns and consumer-advertising spend; reduce or exit if growth decelerates alongside weaker campaign performance. Avoid treating the article’s valuation estimates as a downside floor.
• Keep ORCL on an event-driven watch rather than adding solely on backlog. Reassess after disclosures on backlog conversion, capex, operating cash flow, and financing obligations; a rising cash burn without corresponding deployment or revenue progress falsifies the leveraged-cloud thesis.
• For NOW, wait for evidence that AI Control Tower adoption produces paid expansion and durable retention before underwriting orchestration leadership. Track customer usage and monetization against bundled offerings from larger cloud and software platforms.
• For NFLX, require sustained ad-tier engagement, ad yield, and advertiser retention before paying for an advertising-growth thesis. If those indicators are unavailable, treat the ad catalyst as optionality and avoid extrapolating it into estimates.