Tech stocks are oversold and it's time to "aggressively" buy into the sector, according to Wedbush.- It recommended investors pick up shares of
Apple , software and cybersecurity names.
Tech stocks have taken a beating by investors anticipating the
The tech-focused Nasdaq Composite dropped 2.2% on Wednesday after minutes from the Federal Reserve's March meeting showed that policy makers agreed they should move "expeditiously" in raising interest rates in the face of surging inflation. The Nasdaq is off its lows of the year but was down 11% year-to-date as of Wednesday.
It's now "time to aggressively own tech names," as the sector is as oversold as it has seen since 2015, Wedbush analyst Dan Ives said in an early Thursday note.
"Clearly tech stocks are now selling off with this macro news as well as 'fighting the Fed' fears into a 1Q tech earnings season in which investors are fearing the worst," he said.
"In our opinion, at this point the NYC cab driver knows about the transparent tightening Fed path ahead and we believe fears around a fundamental tech slowdown are way overdone relative to our recent tech checks in the field," he said.
Ives said they would be "strongly" buying shares of cloud, software, cyber security, chips, and "stalwart tech names" among so-called FAANG shares, topped by Apple.
"We view Apple as both a Rock of Gibraltar defensive tech name as well as the best 5G tech play in the market" and its shares will get back to $200 again in 2022 "as the Street better appreciates the growth story playing out globally despite supply chain issues," said Ives.
Microsoft, Oracle, Adobe, and Salesforce are top software names to own, and the shift to cloud services will "disproportionally benefit" a handful of vendors led by Microsoft, Amazon (AWS), and Google followed by Oracle.
Also, Wedbush said with elevated levels of cyberattacks, companies most exposed to cloud cyber trends include Palo Alto — its top pick of the group – as well as Zscaler and Crowdstrike.