A wave of selling hit the market, with the SPDR S&P 500 ETF (NYSEARCA: SPY) closing down 1.66%, its sharpest decline since early October. Uncertainty increased post-government shutdown with key October economic reports potentially delayed, including the CPI release.

Tech and megacap growth stocks experienced selling pressure due to AI capital expenditure concerns, impacting companies like Meta (NASDAQ: META), Oracle (NYSE: ORCL), and Microsoft (NASDAQ: MSFT). Valuations have been pressured, pushing some leaders into oversold territory, presenting potential trading opportunities.

Meta closed around $610, down 23% from September highs, with deeply oversold conditions confirmed. Fundamentals remained strong last quarter, with an EPS of $7.25 and revenue growing 26% YOY to $51.24 billion. However, investor concerns arose from Meta’s increased 2025 investment outlook of $70-$72 billion for AI infrastructure build-out.

Oracle has fallen over 37% from its September highs due to AI-related capital expenditure worries and slight misses on revenue and earnings expectations. Approaching its 200-day SMA, Oracle may present a setup for a short-term rebound if support holds, although questions remain over earnings growth and AI investments.

Microsoft faced pressure after confirming a double-top pattern and pulling back from highs. Earnings in late October were strong, but concerns arose over increased AI-related capital spending impacting margins. The question for investors is whether these investments will yield long-term returns, potentially offering attractive entry points for tech stocks.

Read more at Nasdaq: Are These 3 Oversold Tech Giants Ready to Rebound?