Shares of Nvidia (NASDAQ: NVDA) are starting to look like a relative value play after fluctuating in a consolidation channel around $180 per share for the past few quarters. Undoubtedly, this sideways “correction” might be necessary before the GPU juggernaut can regain traction again. While shares of NVDA certainly look close to the cheapest they’ve been in a number of years, I’m in no hurry to load up, especially since there are far better deals elsewhere.
So, why settle for a 11% drop from peak levels and a sideways move when there are other, far cheaper tech titans that have been marked down by well over 20%?
While Nvidia stock with a P/E in the 20s will be worth a second look, let’s just say I’d much rather look to other harder-hit plays in the tech scene if you’re looking for a timely bargain, especially as the tech trade looks to find its footing again after getting rocked in the first quarter of 2026.
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Constellation Software
Constellation Software (TSX: CSU) got crushed amid the panic-selling in the software space. Of course, new AI coding tools could drive down the price of software. But, at the same time, it’s not like today’s enterprise software platforms can be replaced tomorrow by vibe coding. Underneath the hood, there’s a ton of data, expertise, and, of course, proprietary AI that can act as a suitable defence for firms that have imploded by double-digit percentage points in recent months.
Personally, I think the selling is now overdone in a name like Constellation. While the AI wave could change the software business forever, I view the indiscriminate selling across the space as opening up a door for some dirt-cheap mergers and acquisitions (M&A) for firms with the capital and know-how. On the acquisition front, I view Constellation as in a deal maker’s sweet spot.
As Constellation starts placing more bets (it recently picked up a stake in shares of Sabre), I think CSU stock might come out of this tech wreck in a better spot. While AI is going to change how we think about and use software, I don’t think the magnitude of the decline in software is at all warranted. Software firms know how to adapt, and they can use AI tools to their advantage.
Given this, perhaps it should be no surprise to see CSU stock and the rest of the software ricochet so sharply in more recent weeks. Investors were in sell-first mode, and now that things have settled, many are in buy-back mode.
Deep discounts in the software scene
Though time will tell if the software bounce has room to run, I think valuations remain very enticing right here now that discounts are in the 30-55% ballpark. CSU stock itself is still off 40%, which, in my view, makes the name stand out as a deep-value player in an unloved corner of the market.
Buying the dip is never easy, but the potential rewards could have the potential to be outsized, especially if it turns out the market overreacted to an overblown headline that’s soon to be forgotten about.
