Wedbush’s Ives says to buy the dip in tech stocks
- Tech stocks took a beating last week on fear of tighter monetary policy.
- Wedbush's Dan Ives recommends doubling down on tech stocks.
- Apple and Microsoft were down in premarket trading on Monday.
Tech stocks took a beating last week as rising inflation and the associated fear of tighter monetary policy pushed investors to the backfoot. The pullback in tech stocks, however, is a fine buying opportunity, as per analyst Dan Ives of Wedbush Securities.
Commenting on the ongoing rotation in the tech sector from growth to value stocks, Dan Ives said on CNBC’s “Worldwide Exchange”:
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“Some areas of tech, including cloud and cybersecurity, represent transformational growth opportunities that we have never seen in over 20 years of covering tech stocks.”
Dan Ives sees ample opportunities in the tech sector
Ives hinted at digital transformation worth $2 trillion (£1.42 trillion) in the 5G, cybersecurity, and cloud business in the coming years that will lift tech stocks to record highs. Many CIOs, he highlighted, are already planning on going fully cloud in the upcoming years. The analyst said:
“Herein speaks to why despite the rotation, multiple compression, and red screens, we stay unwavering on our multi-year bull thesis for tech stocks which we expect will go well into 2022.”
Ives highlighted that the Biden Administration is taking more interest in cybersecurity and quoted the Colonial Pipeline ransomware attack as he expressed confidence that there were ample opportunities in the tech sector.
Wedbush’s notable bets in cybersecurity include Crowdstrike, Palo Alto, Sailpoint, Zscaler, and Fortinet. Ives also said on CNBC’s “Worldwide Exchange” that he liked names like Telos in the cybersecurity space. Paul Meeks of Independent Solutions Wealth Management also recommended not giving up on tech stocks last week.
Dan Ives recommends doubling down on tech stocks
According to the analyst, instead of pulling out of the tech stocks, he sees now as a golden opportunity for investors to double down on stocks like Apple, Microsoft, DocuSign, and Pegasystems. According to Business Insider, Ives said in a note to clients on Monday:
“In a nutshell, we believe relative to the outsized growth prospects ahead, this is not the time that we are throwing in the white towel on our tech bull thesis but rather doubling down on this opportunity to own the secular winners in FAANG, cloud, cybersecurity, and 5G looking ahead.”
Apple stock (NASDAQ: AAPL) opened close to 0.5% down in the stock market on Monday and lost another 1% in the next hour. Microsoft Corp (NASDAQ: MSFT), on the other hand, was down over 0.5% in premarket trading and tanked a little under 1% on market open.