Tech stocks have acted like a stock market safe haven at various times in recent years when volatility went up, such as during the Covid pandemic. But a recent slide in the tech stock often considered to be the safest of all, Apple, has raised questions about that role for the market’s leading sector.

As of last week, Apple was a notable underperformer, down 0.6% over the past two months (approximately 40 trading sessions), according to CNBC research, and down 6% over the three-month period through June 20, according to Morningstar.

But that doesn’t mean tech hasn’t bounced back strongly from the early 2025 tariff-triggered selloff. The SPDR Info Tech Sector Fund (XLK) is up over 12% in the past three months through June 20, while the Invesco Nasdaq Trust (QQQ) has produced a 10% rally, according to Morningstar. That is close to double the return of the S&P 500 Index in the same time period.

It’s Apple that’s no longer acting like the stock that in recent years had seemed to function as the equities market’s closest thing to a bond. The recent gap is Apple’s worst relative performance to its own sector fund since December 2002, according to CNBC research. It’s the only of the so-called “Magnificent 7” tech stocks to recently trade below both its 50- and 200-day moving averages.

How are investors playing tech in an up-and-down year for the market? Buying the broad stock market on the dips has worked, and is an inherent bet on tech. Investors have a hefty weighting to tech in S&P 500 index funds and ETFs this year, where the top tech stocks represent over 30% of the index.

Amid the recent tariff volatility, the Vanguard S&P 500 ETF (VOO) has bested all other funds in new flows from investors, and in fact, it’s on pace to break the record for annual net inflows, a mark it just set last year. It’s currently sitting at $82 billion in net inflows in 2025, more than four times as much as the next biggest haul for equity ETFs, the Vanguard Total Stock Market Fund (VTI).

Both the Invesco Nasdaq 100 ETF (QQQM) and the Invesco QQQ Trust make the top 10 among all ETFs, with roughly $9 billion and $8 billion in inflows, respectively. The Vanguard Information Technology ETF (VGT) has taken in close to $3 billion.

VettaFi director of research Todd Rosenbluth said the broadest bets on a resilient U.S. stock market are also the biggest bets on tech. “I think many people are having tech and AI as part of a broader portfolio, as opposed to leaning in solely onto the technology sector,” he said on a recent CNBC “ETF Edge.”

And he added that investors are for the most part using traditional approaches to hedging stock market risk, with strong interest in fixed income ETFs, especially the shortest-term bonds and notes where they can “earn some income, and not take on much risk,” he said.

Rosenbluth said it is true that during Covid the tech sector had been seen as a relative safe haven for investors. But in 2020, there was also the sudden surge in reliance on technology for those who were working or attending school remotely, leading to a unique tech sector boom. The tech sector went through a significant downturn in 2022, but it has remained a fairly reliable grower, he said, with the emergence of AI and rise of the chip sector led by Nvidia.

“Large-cap tech is a relative safe haven, but we’re seeing investors want the benefit of diversification with more traditional defensive sectors,” Rosenbluth said. That includes sector ETFs covering utilities (XLU) and consumer staples (XLP), which have both narrowly outperformed the S&P 500 this year, and come close to tech’s level of year-to-date return amid the extended bout of volatility.

The current price-to-earnings ratio on the tech sector, at 28.5, is higher than the S&P 500 P/E of 22.4, but is matched by the P/E for the consumer discretionary sector, and remains below real estate, which has the highest P/E in the index.

For others who follow tech stocks, any market volatility remains a buying opportunity. Wedbush Securities global head of technology research Dan Ives said on “ETF Edge” that times of geopolitical strife are no different. And he said concerns about the valuation of the sector compared to other sectors have cost investors if that kept them out of tech stocks in recent years.

“My view of tech, if you focus just on valuation, you missed every transformational tech stock of the last 20 years. And I believe the market is still massively underestimating what the growth is going to look like for the AI revolution” said Ives, whose firm recently launched an AI ETF branded with his name. “That’s why any type of geopolitical events, we always view as opportunities to own these names cheaper, that’s kind of always been our view the last 25 years we have covered tech.”

One investor approach of note this year is certain, Rosenbluth said, regardless of how any single investor approaches tech stocks. “In 2025, investors are getting used to a more volatile time period than they were even a month, or three months ago, more accepting of volatility,” he said.

Disclaimer