What HappenedWedbush analyst Dan Ives said in a recent note that tech stocks “way oversold on Fed fears.”
The analyst noted a wide array of negative issues like the expected interest rate hikes from the Federal Reserve and the Russia-Ukraine geopolitical tensions. He said these have created a “perfect storm sell off” in tech stocks over the last month.
Why It MattersApple announced quarterly earnings per share of $2.10 on Friday, beating a Street estimate of $1.88. First-quarter revenue came in at $123.9 billion, beating the estimate of $118.28 billion.
Microsoft’s second-quarter earnings per share of $2.48 beat Street estimates of $2.31. The Satya Nadella-led company announced revenue of $51.7 billion in the period, which beat a $50.9 billion estimate.
Google parent Alphabet Inc., Meta Platforms Inc., and Amazon.com, Inc. are due to release their quarterly earnings data on Feb. 1, Feb. 2, and Feb. 3, respectively.
“Important data points from Google and Amazon will be key around the cloud story with the Street laser focused on the overall demand story for 2022 and beyond despite macro swirls,” said Ives.
Apart from these tech giants, Ives noted cyber security remains a “major pocket of cloud driven strength.” Wedbush expects robust numbers over coming weeks from companies such as Tenable Holdings, Inc. , CyberArk Software Ltd., Palo Alto Networks, Inc., and Zscaler, Inc..
Wedbush remains bullish on tech, as digital transformation taking place today is not slowing down but rather picking up pace over the coming years.
“Microsoft and Apple were pillars of robust strength in a market storm last week and the Street needs to hear more good news from tech stalwarts with fundamentals now in the focus,” said Ives.