After nearly tripling from its 2022 bear market low, the technology-heavy Nasdaq-100 index is facing a critical juncture. The benchmark closed 9% below its record high last Friday, as growing investor doubts about the durability of the artificial intelligence spending boom weigh on top semiconductor constituents including Nvidia and Micron Technology. For long-term investors, however, the pullback is creating attractive opportunities in high-quality growth names with solid underlying fundamentals.
Worries that corporate AI expenditure could lose steam have rippled across the U.S. tech sector, dragging down some of the Nasdaq-100’s largest and best-performing stocks. Analysts caution the downturn could deepen if market sentiment fails to rebound. Yet historical market patterns show that broad U.S. equities have consistently recovered to scale new highs over multi-year time horizons, framing the current selloff as a potential buying window for patient capital.
Among the beneficiaries of rising AI-era risk is cybersecurity firm Zscaler (ZS), an early trailblazer of zero trust security architecture that has emerged as a core defense against AI-powered threats. Hackers are now using AI to launch highly sophisticated incursions into corporate networks, while many businesses have exposed sensitive data to third-party AI models without adequate guardrails, driving unprecedented demand for robust cybersecurity infrastructure.
Zscaler’s Zero Trust Exchange platform protects entire enterprise ecosystems starting at the identity layer. The system treats every login attempt as potentially malicious, cross-checking user credentials, geographic location and device details to flag unauthorized access, and grants employees only the application permissions required for their roles to limit breach exposure. This year, the company rolled out new AI-specific security tools for the platform, including monitoring for communications between AI agents and endpoint protection for devices running AI software. Zscaler delivered record revenue of $3.35 billion in fiscal 2026 ended July 31, marking a 25% year-over-year increase. Shares currently trade at a price-to-sales ratio of 11.3, a discount to multiple leading peers, meaning further broad-market weakness could present an even more compelling long-term buying opportunity.
Social media conglomerate Meta Platforms (META) is also leveraging AI to unlock new growth as its core user base nears global saturation. The company’s portfolio of apps counts more than 3.6 billion daily active users, nearly half the world’s population, leaving limited runway for net user additions. To offset this, Meta has integrated AI deeply into content recommendation algorithms across its flagship social platforms to boost user engagement and ad impressions. The strategy is already delivering results, with user activity on Facebook and Instagram hitting all-time highs in the third quarter ended September 30.
In September, Meta expanded beyond social media with the launch of its personal AI agent Muse, which has already surpassed 10 million users. One-quarter of Muse users leverage the tool as a personal shopper, with an average purchase value of $200, while others use it for email management and daily task automation. Meta expects Muse to eventually serve billions of users across a wide range of life scenarios, substantially expanding its addressable market and positioning it to compete with traditional internet search engines. Amid the recent tech selloff, Meta shares have fallen 20% from their peak. The stock now trades at a price-to-earnings ratio of just 20.9, well below the Nasdaq-100’s 29.9 multiple, and is looking increasingly attractively valued for long-term investors.
All told, the ongoing Nasdaq-100 correction is driven by near-term anxiety over the pace of AI industry growth, not a breakdown in the long-term thesis for leading tech companies. Firms with durable technological moats and proven commercialization models have seen their core growth narratives remain intact. As market sentiment gradually normalizes, the window to accumulate positions in high-quality growth stocks continues to widen for investors with a long-term outlook.
