2 Beaten-Down Tech Stocks Coiled for a Massive Rebound

In today's uncertain economic environment, several tech stocks once regarded as high-flyers have sold off. Amid high capital expenditure (capex) costs and uncertainty as to how artificial intelligence (AI) will affect the tech landscape, many investors have soured on the sector.

Fortunately, the sell-off could be a blessing in disguise for investors who wanted to buy into tech but felt valuations were too frothy. As many stocks trade at a significant discount, it may be time to consider these two tech stocks.

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Oracle

Perhaps no stock over the last few months has seen a more dramatic reversal of fortune than Oracle (NYSE: ORCL). The stock was riding high after it formed a $300 billion partnership with OpenAI that sent its stock soaring in 2025.

However, hope gave way to skepticism as the year ended and 2026 began, as some questioned whether OpenAI could live up to its end of the bargain. Moreover, investors are balking at Oracle's massive debt and its spending spree to keep up with the heavy demand for its lower-cost AI infrastructure.

Additionally, it has already run up nearly $135 billion in debt and plans to spend an additional $50 billion on capex in 2026.

Investors likely overreacted to Oracle's situation and caused a sell-off that wiped out more than half of the stock's value. Oracle recently delivered encouraging news in its earnings report for the third quarter of fiscal 2026 (ended Feb. 28). Its backlog has grown to $553 billion, with an 84% increase in cloud infrastructure revenue suggesting those bookings are increasingly translating into revenue.

Amid the negativity, Oracle's price-to-earnings (P/E) ratio has fallen to 28, and looking ahead, the forward P/E ratio of 21 indicates the stock has moved into oversold territory. Hence, as more of the backlog turns into revenue, Oracle could see a recovery as investors return to the stock.

Sea Limited

Another stock that has arguably become oversold is Sea Limited (NYSE: SE). The Southeast Asian tech conglomerate often gets compared to Amazon or MercadoLibre as it supports a market-leading e-commerce business in Southeast Asia, coupled with fintech and gaming segments.

Unfortunately, margin pressures and the massive growth in its loan volume appear to have spooked investors. Since peaking last September, the stock price has fallen more than 55%.

Still, the lower margins in its e-commerce segment came as it expanded its VIP program, which will probably tie more customers to its ecosystem in the long run.

Moreover, lenders that Sea partners with like the way its fintech segment, Monee, utilizes AI to better evaluate borrowers. It's an approach that could expand loan volumes while keeping bad loan risks in check. Also, the gaming segment Garena, which took a huge hit during the pandemic, now reports rising bookings growth.

With these results, revenue grew 36% in 2025. Garena's revenue increased by 26%, while revenue surged 60% for Monee. Shopee's revenue was up 33% over the same time frame.

Also, thanks to the pullback in the stock price, its P/E ratio is now 33. Considering that expected growth in 2026 takes the estimated forward P/E ratio to 22, that low earnings multiple and the rapid growth could foster a rebound in the stock price.

Will Healy has positions in MercadoLibre and Sea Limited. The Motley Fool has positions in and recommends Amazon, MercadoLibre, Oracle, and Sea Limited. The Motley Fool has a disclosure policy.