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Tech stocks appear to be derailed lately, with the Nasdaq Composite COMP,
collapsing on Monday to take the benchmark 7% below its all-time high.
For technical analyst closely followed Dan Ives of Wedbush Securities, this is just a “white articulation moment” that will soon pass. Ives says worries about rising yields and growth stock valuations will give way to a year-end rally of at least 10% in the tech space.
“While the longtime bears will continue to scream in a crowded theater on a 20 basis point move in the 10-year TMUBMUSD10Y,
instead we are focusing on the $ 2 trillion digital transformation opportunity in the business and consumer ecosystem over the coming years, which is at the gateway to technology, ”he said in a note to customers.
“While the valuation debate will continue to be at the forefront in an environment of rising rates, we fundamentally believe that the streets massively underestimate what technological growth looks like in 2022 and therefore remains a core tenet of our business. steadfast technological bull thesis with this further hammering the time of the table to own technology stocks.
Ives concedes that the pandemic has caused “a massive surge” in demand for the cloud, e-commerce, cybersecurity, and other tech companies. But he said it was far too early to throw in the towel and investors should double down.
Apple AAPL,
is Wedbush’s favorite among FAANG stocks, as he cited Microsoft MSFT,
DocuSign DOCU,
Matterport MTTR,
and Pegasystems PEGA,
as preferred cloud stocks. When it comes to cybersecurity, Wedbush’s favorites are Varonis Systems VRNS,
Zscaler ZS,
TLS Telos,
SailPoint Technologies SAILING,
Tenable Holdings TENB,
Palo Alto Networks PANW,
and Fortinet FTNT,
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