Investors should buy the tech stock before the year-end rally, according to Wedbush’s Dan Ives.
Ives said on Friday that the combination of strong second-quarter earnings and a less hawkish Fed should boost stock prices.
“With the Fed waving the white flag on rate hikes, we see a green light for the risk environment at the end of the year,” Ives said.
The combination of strong second-quarter earnings results and a less hawkish Federal Reserve means investors should start buying technology stocks, according to a note Friday from analyst Dan Ives at Wedbush.
Ives argued that the continued decline in technology stocks, which sends Nasdaq 100 Down about 6% from its recent high, it represents a buying opportunity for longer-term investors who want to take positions for the next bull market.
“We’re holding tight to our bullish call that a 12% to 15% rally in technology stocks is in the cards heading into the year end as the new tech bull market begins,” Ives said.
Ives’ confidence stems from better-than-expected second-quarter earnings results from technology leaders such as AmazonAnd MicrosoftAnd appleamong others, in addition to the growing demand for artificial intelligence technologies.
“AI remains in the spotlight, driving success for some and headwinds for others. From the hundreds of conference calls we have listened to over the past month, it is clear that the topic of AI is changing the corporate and consumer landscape going forward and creating bifurcated spending environments for winners and losers in this backdrop.” Ives explained.
Ives pointed to companies in the cloud, cybersecurity and digital advertising sectors that must contend with continued tailwinds from the advent of AI, Similar to what happened with the Internet in 1995.
“Rome wasn’t built in a day, and neither will the AI ecosystem, but let’s be clear that this build is unlike anything we’ve seen since the Internet in 1995, and the ramifications are starting to play out in the consumer/enterprise landscape,” Ives said.
This strength in artificial intelligence should help boost technology stocks, as should a less hawkish Federal Reserve. The CPI report for July showed that inflation is still moderating, and this should allow the Federal Reserve to pause interest rate hikes at the FOMC meeting next September. some So we can expect the Fed to cut interest rates early next year.
“With the Fed waving the white flag on rate hikes, we see a green light risk environment at the end of the year and believe we are only in the middle of this new bull market period for technology in the next 12 to 18 months,” Ives said. .
A 15% rise in the Nasdaq would send the index to levels not seen since the end of 2021.
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