The best time: Despite the tech lull in the meantime: Analyst advises investors now to get into these stocks | message
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Tech values recently under pressure
The industry is expected to pick up significantly in the coming year
Cloud solutions and cybersecurity shape the sector
Strong bond yields weigh on tech stocks too
As a result of the renewed rise in government bond yields, the equity markets have been significantly weaker in recent weeks. Tech stocks in particular suffered from the uncertain situation, which was also reflected in the price of the technology-heavy NASDAQ Composite. “The risk-off trade for tech was  painful for tech investors, as concerns about high valuations, bubble fears, rotation trading, rising returns and the focus on reopening strategies are in the foreground “, Wedbush analyst Daniel Ives also explains to the market portal” MarketWatch “. Nevertheless, the strategist believes that Tech stocks will not only pick themselves up again in the long term, but will even rise to previously unimagined heights.Tech stocks gave a first impression of this on Tuesday when a strong recovery began in the sector.
Growth spurt expected in 2022
In the next year, the entire sector is expected to grow by 25 percent, according to the market expert. This is being driven primarily by the rally of the industry giants Facebook, Amazon, Apple, Netflix, Alphabet and Microsoft, which have so far benefited greatly from the corona pandemic and have recorded strong growth in recent months. But DocuSign and Nuance Communications should also benefit from the digitization trend. The two companies offer software solutions for digitally signing documents and for language processing. According to the expert, cybersecurity stocks such as Zscaler, Palo Alto Networks and SailPoint also offer particularly great potential. The combination of the popular cloud services and strict data security is a future trend. Ives therefore advises investors to invest in these stocks as soon as possible before the upward trend resumes.
The digital trend is still at the very beginning
It is not foreseeable that the trend towards digital solutions will ebb over the next few years, as the analyst MarketWatch further explains. In addition to cloud and cybersecurity services, e-commerce providers and companies that use the new 5G mobile communications standard are particularly in demand. Although he points out that providers of software solutions that are supposed to support collaborative work, such as Zoom, Slack, Citrix or Microsoft, only expect moderate growth by 2022, some company managers are said to have said 30 to 40 percent compared to Wedbush wanting to offer their employees remote work in the future – in whatever form. As the home office trend continues, employers should gradually move closer to the cloud transformation, which Ives believes will give the tech sector a further boost.
Biden politics is playing the tech industry in the cards
Although threatened regulations represent a risk for the tech industry, under the presidency of the Democrat Joe Biden the risk should be kept within limits, according to Ives. In this way, Biden could ease the tense sentiment between the US and China trading giants, which could benefit both US and Chinese technology companies. Biden also announced major plans to expand cybersecurity in the United States. So the signs for the industry are good, said Ives. Finally, he advises investors not to allow themselves to be influenced by doubters who forecast a burning market for the tech sector – on the contrary. This is a sign of getting into the industry now and snagging a bargain or two before the next price rally begins.
Finanzen.net editorial team
This text is for informational purposes only and does not constitute an investment recommendation. Finanzen.net GmbH excludes any right of recourse.
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