Business
Analysts name technology stocks to be bought after the sale
Three analysts share their outlook for technology, with one saying it is ready for a tough rally, and another mentioning some “very interesting” stocks in the sector. Chris Watling, CEO of Longview Economics, said the stock market as a whole is “ready to rally.” “We just need a whiff of good news from somewhere to get the rally going,” he told CNBC’s 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 technology-heavy Nasdaq Composite ̵[ads1]1; which has lost 3.8% in the last week – is already deep in the bear market, 30% lower than the highest. “As [Warren] Buffett said, “You want to be greedy when people are scared and scared when they are greedy, so I think it’s time to be greedy from a tactical trading point of view,” Watling added. Asked how to invest in the current environment, Watling said said the technology will probably do the best of any sector over the next few months. “Often the rule of thumb is that what is hit the most is what accumulates the most … Indicators we look at show [tech] is deeply beaten, and it should accumulate quite hard, and it should give better results, “he said. Nasdaq was down around 27% so far this year on Friday. Shares with super-high growth vs. Big Tech Michael Purves, founder and CEO Director of Tallbacken Capital Advisors said that looking ahead, it was important to distinguish between the technology giants – such as Apple, Microsoft and Alphabet – and the type of shares in ARKK ETF – “the shares with very high growth”. “Many of them have corrected 70 or 80 or even 90% from the top a little over a year ago, “Purves told CNBC on Friday. Cathie Woods ARK Innovation ETF is down over 50% so far this year. He said these stocks reflect the” 2000, 2001 phase ” when the dotcom bubble burst. ‘Yes, everything is right now, but [year] 2000 arguments are really referring to that part of the market with super growth. “” Microsoft and Google and so on, they are being revalued with high interest rates, but let’s not forget [they] is without a doubt the modern form of a power tool – but with fantastic financial calculations, with fantastic cash reserves to help support revenue growth through share repurchases going forward, “Purves added. Tech stock options Neil Campling, Head of Technology, Media and telecommunications research at Mirabaud Securities, said there were some “very interesting opportunities” in the sector right now. “It’s happening now when I think the technology sector is refocusing – not so much chasing revenue at any cost – but actually looking at managing costs and looking at ways to improve margins,” he told CNBC’s Street Signs Europe on Wednesday. One option for technology companies looking to save money is to turn to companies that help manage costs, such as software vendors, Campling added. “Stocks like ServiceNow, Workday, Qualys are types of companies that can help manage that process of looking for where there is fat… that can be extracted and can really help drive better efficiency,” he said. ServiceNow sells cloud-based software, while Workday creates HR technology and Qualys provides cloud security. “At the corporate level, especially in inflationary environments … the technology’s deflationary economy can really stand out for companies that can offer such services,” he said of the stocks he mentioned. In an interview with CNBC last month, ServiceNow CEO Bill McDermott described business software as “the most deflationary force in the world”, claiming it helps companies deal with issues such as rising prices and interest rates, as well as supply chain disruptions. – CNBC’s Lauren Feiner, Sarah Min and Hannah Miao contributed to this report.
A woman walks in the rain outside the New York Stock Exchange (NYSE) in the financial district of lower Manhattan during the outbreak of coronavirus (COVID-19) in New York, April 13, 2020.
Andrew Kelly | Reuters
Three analysts share their outlook for technology, with one saying it is ready for a tough rally, and another mentioning some “very interesting” stocks in the sector.
