Investors should consider these tech buying opportunities.

• Although technology may have contributed to the market's recent volatility, the sector is poised for future growth. The September 2000 downturn was resolved in just eight months.
• The Fed's first rate increase will benefit companies such as Adobe, Autodesk, and Intuit.
• Less established, more beaten-down companies with resilient businesses, like Zoom, will offer more explosive growth opportunities.

In January, markets experienced their worst monthly performance in nearly two years, with technology stocks taking the brunt of the damage. Notable earnings misses and the possibility of four interest rate hikes by the Federal Reserve in 2022 caused investors to become skittish.

Revenue-multiple compression in this sector tends to be short-lived, as seen in September 2000 when tech took a beating, but despite an economic downturn, it was over within eight months.

Despite high inflation, the economy is strong and corporate earnings remain solid, providing a solid foundation for a quicker technology recovery this time around.

The first rate hike from the Fed, which could occur in March, may cause growth stocks to be rattled again. If the Fed deviates from the norm and institutes a half-point increase, bargain hunters may emerge, setting the stage for a potential market downturn.

Despite the faster-than-expected decline in tech and software, the peak-to-trough decline is consistent with past slumps that occurred with rate increases. However, software companies are still trading at about double the 20-year average.

SaaS firms generate healthy recurring revenues through subscription-based models, which allows them to expand margins and produce more free cash flow.

The high valuations in this space are justified, as evidenced by the strong earnings reports of software companies in the fourth quarter.

So, where is a good place for investors to look?

The Fed's first increase will benefit stalwart companies such as , and due to their defensible businesses and strong free cash flows. However, since these companies are mature, significant gains are unlikely.

The greatest growth prospects will be with companies that have weathered adversity and have strong business models, despite their lower market valuations. Notably, this company has experienced a decline of over 75% since its peak. Such a significant drop may indicate to some that it was simply a pandemic-driven stock, with underlying issues that will hinder its long-term success.

Although the company experienced unjustifiable growth as remote work became popular in 2020, many businesses will continue to use Zoom in the future due to its simplicity compared to other platforms like Teams.

As millions of workers return to offices, organizations will need to replace their outdated phone systems, providing a significant opportunity for the company. While Zoom may not capture all of that business, it will still see substantial growth.

Zoom is currently trading at a discount compared to the average SaaS company, and investors will gain more clarity on the company's future prospects after it reports earnings on March 1 and provides 2023 guidance. Those who sold the stock based on the assumption that it was a one-time success or hedge funds that shorted it on implied billings growth last quarter may be caught off guard by the forecast.

The case for is more straightforward.

The adoption of digital communication tools during the pandemic has accelerated the shift of businesses of all sizes towards cloud computing. As a result, there is a growing need for cybersecurity measures to protect against cyber threats. This presents a significant market opportunity that continues to expand.

CrowdStrike's current trading price of 14 times 2023 revenue guidance is a premium compared to the average of SaaS firms, which trade at about 10 times 2023 revenue guidance. However, it's important to note that CrowdStrike's implied revenue growth is significantly higher at approximately 70% compared to the industry average of 20%.

It may be worth considering other fast-growing companies, but they are still among the most expensive within software, so it's best to wait until after the first Fed rate hike before adding either.

Despite the pandemic, stocks remained resilient and bounced back quickly.

The rally has ended, but opportunities will still arise. It's important to remain patient and be aware of when and where to take advantage of them.

— By Andrew Graham, founder and managing partner of Jackson Square Capital