Tesla, Microsoft May Have Entered Warren Buffett Territory — Growth Stocks Aren't Supposed To

Something unusual is happening in tech. Valuations have fallen so far in 2026 that traditional value investors — the bargain hunters who normally wouldn’t touch high-growth stocks — are starting to pay attention.

• TSLA stock is moving. See the chart and price action here. 

That’s according to Canadian asset manager Middlefield Group, which noted in recent market commentary that tech stock valuations “have compressed to levels that are no longer just attractive to growth buyers." 

"They are now actively drawing the attention of traditional value investors who recognize the severe disconnect between current multiples and future cash flow generation potential,” the firm said.

The numbers illustrate why. The Nasdaq Composite is down more than 4% year-to-date. And the iShares Expanded Tech-Software Sector ETF (BATS:IGV) has cratered roughly 30% from its September 2025 peak.

Among the mega-caps, Tesla Inc. (NASDAQ:TSLA) and Microsoft Corp. (NASDAQ:MSFT) have been hit hard — making them prime examples of the kind of valuation compression Middlefield describes. 

The paradox is that earnings haven’t fallen with prices. 

Middlefield wrote that “technology continues to deliver the best earnings growth in the entire market, and it is doing so by a remarkably wide margin and with continued positive revisions.”

BlackRock Investment Institute separately noted that tech-sector earnings are now forecast to grow 43% in 2026. That’s up from 26% last year — even as stock prices have declined.

Goldman Sachs Research observed that tech’s price-to-earnings ratio has fallen below consumer staples and industrials, despite far stronger growth expectations. That’s the kind of disconnect that value investors are trained to exploit.

Middlefield isn’t just calling the sector interesting — they are calling it actionable. 

The firm wrote that investors should “seriously consider increasing their allocations to the Technology sector,” arguing that “the recent price corrections have fundamentally de-risked the sector.”

In Middlefield's view, the 2026 selloff hasn’t broken tech’s earnings engine. It has simply made it cheaper.

Photo: Hryshchyshen Serhii / Shutterstock