Should Investors Dismiss Friday's Selloff?

Last Friday, stock markets pulled back after tensions between Israel and Iran heightened caution among investors. The Dow Jones lost 1.79%, while the Nasdaq (QQQ) and S&P 500 (IVV) dropped.

Not surprisingly, technology stocks declined, led by Nvidia (NVDA). Should investors dismiss the market’s mild selloff? The market rebounded, ever since the Liberation Day set fresh lows. It needed an excuse to pull back.

Tech stocks have the most downside risks since valuations are excessive. Broadcom (AVGO), Analog Devices (ADI), Salesforce (CRM), and Adobe Systems (ADBE) are examples of high-flying firms to consider selling. Oracle (ORCL), by contrast, gained 7.68% on June 13 after posting strong results. The database supplier traded at new highs, giving Larry Ellison the title of the world’s second richest person. The company has a remaining performance obligation of $138 billion, up by $8 billion from the previous quarter.

Oracle’s 41% RPO growth is impressive. Although investors missed out on the ORCL stock rally, they may continue to hold onto growth companies. Credo Technology (CRDO), for example, posted revenue growth of 179.7% Y/Y to $170.03 million in its first quarter. It is projecting customer base diversification. Three hyperscaler solutions contributed to more than 10% of its revenue.

Credo has a strong market position. Its optical market is gaining traction. Expect the firm to win more contracts in the 800-gig transceiver markets.