By Senad Karaahmetovic
Wedbush analysts weighed in on the ongoing tech sell-off. They described the latest sell-off as "brutal" and said investors didn't like yesterday's worse-than-expected earnings report from Micron (NASDAQ:MU).
Tech-heavy Nasdaq Composite Index closed 2.18% lower yesterday to hit the lowest levels in about 7 weeks. The index is now approaching the October lows sitting near the 10,000 handle.
"While the Santa Claus rally now appears to be out the window on growth fears, we believe the underlying set up for the tech sector has created many opportunities for growth investors willing to see on the other side of this dark macro storm with oversold tech stocks reminding us of the 2009 timeframe with tech now viewed as untouchable by many growling bears on the Street," they said in a client note.
The index has strong technical support near 10,300, which it tested yesterday, with a break of this zone likely accelerating a fresh leg lower.
Looking forward to 2023, Ives expects a "choppy, yet positive tech tape in 2023 for well positioned names."
"In this carnage we see growth opportunities as we believe overall the tech sector will be up roughly 20% in 2023 from current levels with Big Tech, software, and semis leading the charge despite the macro/Fed wild cards," the analysts added.
The analysts remain positive on the tech stocks as spending in sectors like cloud, software, and cybersecurity remains solid. They believe an increased M&A activity would pave the way for tech stocks to re-rate higher in 2023.
"This is as under-owned we have seen tech stocks going back to the 2009/2010 timeframe and in our opinion represents great entry levels for longterm investors."
Along these lines, the analysts picked the following tech stocks to own for 2023: Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Salesforce (NYSE:CRM), Palo Alto Network (NASDAQ:PANW), CyberArk (NASDAQ:CYBR), Checkpoint Software (NASDAQ:CHKP), and Zscaler (NASDAQ:ZS).