Three analysts share their outlook for the tech, with one saying it’s poised for a hard rally, and another naming “very interesting” stocks in the sector. Chris Watling, managing director of Longview Economics, said the stock market as a whole was “ready to rally”. “We just need a whiff of good news somewhere to spark this rally,” he told CNBC Street Signs Europe on Wednesday. His comments come after a wild week for stocks that saw the S&P 500 briefly enter a bear market on Friday. The tech-heavy Nasdaq Composite, which has lost 3.8% over the past week, is already deep in bearish territory, at 30% from its highs. “Like [Warren] Buffett said, you want to be greedy when people are fearful and fearful when they’re greedy, so I think it’s time to be greedy from a tactical business perspective,” Watling added. to invest in the current environment, Watling said technology is likely to do the best of any industry over the coming months.”Often the rule of thumb is that what gets beat the most is what rallies the most… The indicators we look at show [tech] is deeply battered and he should come back pretty strong, and he should outperform,” he said. The Nasdaq was down about 27% year-to-date on Friday. CEO of Tallbacken Capital Advisors, said that, going forward, it was important to differentiate between tech giants – such as Apple, Microsoft and Alphabet – and the type of ARKK ETF stocks – very high growth stocks. “A lot of them have corrected 70 or 80 or even 90% from their peak just over a year ago,” Purves told CNBC on Friday. Cathie Wood’s ARK Innovation ETF is down more 50% since the start of the year. stocks echo the “2000, 2001 phase” when the dotcom bubble burst. “Yes, everything is correcting itself at the moment, but the [year] 2000 arguments are really relegated to this very high growth part of the market.” “Microsoft and Google and so on, these are repriced with high interest rates, but let’s not forget [they] are arguably the modern form of an electric utility – but with incredible financial metrics, with incredible cash balances to help support earnings growth through stock buybacks in the future,” said added Purves Tech stocks picks Neil Campling, head of technology, media and telecommunications research at Mirabaud Securities, said there are “very exciting opportunities” in the sector at the moment. noted a shift in tech company operations as Netflix made layoffs, Meta suspended hiring, and Amazon said its warehouses were overstaffed I think the tech industry is refocusing on – not so much looking for revenue at all costs — but more about managing costs and finding ways to improve margins,” he told CNBC Street Signs Europe on Wednesday. no option For tech companies looking to save money, look to companies that help manage costs, such as software companies, Campling added. “Stocks like ServiceNow, Workday, Qualys are types of companies that can help manage this process by looking for where there is grease…that can be removed and can really help improve efficiency,” he said. he said. ServiceNow sells cloud-based software, while Workday makes HR technology and Qualys provides cloud security. “At the enterprise level, especially in inflationary environments… the deflationary economics of technology can really stand out for companies that can offer these kinds of services,” he said of the stocks he named. In an interview with CNBC last month, ServiceNow CEO Bill McDermott described enterprise software as ‘the most deflationary force in the world’, saying it helps businesses deal with issues such as rising prices and interest rates, as well as supply chain disruption ‘ supply. – CNBC’s Lauren Feiner, Sarah Min and Hannah Miao contributed to this report.
A woman walks in the rain in front of the New York Stock Exchange (NYSE) in lower Manhattan’s financial district during the coronavirus disease (COVID-19) outbreak in New York City, April 13, 2020.
andrew kelly | Reuters
Three analysts share their outlook for the tech, with one saying it’s poised for a hard rally, and another naming “very interesting” stocks in the sector.
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