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(Bloomberg) -- It looked like a reckoning was arriving on August 5, when the Nasdaq 100 tumbled over 5% in the seconds after the opening bell, validating fears that a tech bubble was about to burst.

Barely just two weeks and a few rounds of reassuring data later, virtually all those worries are being swiftly swept aside.

The worst intraday tech-stock selloff since 2022, it turned out, looked to investors like a reset that took some of the froth off valuations — and they have piled back in.

“The August selloff was the closest thing we’ve seen to a buying opportunity for tech in about a year,” said Anthony Saglimbene, chief market strategist at Ameriprise Financial. “In an environment where growth is slowing, big tech names offer investors an opportunity to be in companies that are not only growing strongly, but which are more insulated from the economic backdrop.”

The stocks have since staged a sharp turnaround as data signals that the US economy continues to expand and inflation is easing, rekindling the soft-landing speculation that helped power much of this year’s equity-market gains.

The Nasdaq 100 has rallied for the past seven sessions, sending the benchmark to its biggest weekly advance since November and back toward the record high hit on July 10.

At the forefront of the rally were the same heavyweights that had dragged it down. Nvidia Corp. has rallied some 26% off this month’s lows, adding more than $600 billion in market value. Apple Inc. is riding an eight-day winning streak that has it within 4% of a record. An index of the Magnificent Seven tech giants has gained more than 10%.

That doesn’t mean that concerns about the sector’s longer-term outlook have disappeared. But some of the worries that helped sparked the rout — lofty valuations that were getting harder to justify and fears that the Fed would need to shift into recession-fighting mode — have moved to the background again.

“Given their market positions, exposure to AI, their deep pockets and strong profits, big tech stocks deserve a valuation premium,” said Robert Stimpson, co-chief investment officer and portfolio manager at Oak Associates. “We look at tech as having both offensive and defensive characteristics.”

The rally drew fuel from numerous quarters. Hedge funds took advantage of last week’s selloff to load up on tech stocks, as well as other sectors such as communication services and consumer staples, according to data from Goldman Sachs Group Inc.’s prime brokerage. Companies themselves were also aggressive buyers, with Goldman’s buyback desk reporting record orders from corporations. Individual buyers dove in, too, logging the biggest net buying activity of the past 12 months, according to data from Vanda Research.

Of course, the macro backdrop shifted quickly, with weak job numbers now overshadowed by a surge in retail sales, and could very well swing the other way again.

But the companies have continued to throw off big profits. While earnings growth from the tech giants is slowing, it remains immense by traditional standards, allowing them to continue to invest heavily in AI. With reports in from four of the five biggest US technology companies — Microsoft Corp., Alphabet Inc., Amazon.com Inc. and Apple Inc. — profit growth for the group is on track to rise 35% in the quarter ending in June, compared with 13% for the S&P 500 Index.

The investment spending fueled by those profits is boding well for Nvidia, the chipmaker that’s been the biggest beneficiary of the AI build-out. Nvidia is expected to report earnings on Aug. 28 and investors will be paying close attention to what Chief Executive Officer Jensen Huang says about the outlook.

While Nvidia is expected to continue to reap a bonanza, it’s still not clear if AI will yield big profit-making breakthroughs from the companies doing the spending. And those doubts may continue to shadow the stocks despite the recent rally.

“There’s more trepidation when it comes to buying big tech hand over fist, without clear payback periods for AI,” said Ameriprise’s Saglimbene. “That is likely to continue for the next couple of quarters.”

(Updates stock moves throughout.)