A prominent analyst suggests that the tech-stock bull market is experiencing a surge in momentum as more companies join the fray.
According to Dan Ives, the lead tech stock analyst at Wedbush Securities, recent market observations have revealed a robust growth potential for tech stocks. In a note to clients on Friday, Ives stated, “We believe a short covering for the ages for the tech sector into year-end is well underway as the fundamental picture for growth tech stocks is rock solid based on our recent checks in the field.”
In addition to the well-established giants such as Apple, Microsoft, Amazon, Nvidia, Alphabet, Meta Platforms, and Tesla, other players in the tech sector are now poised to take center stage. The prevalence of artificial intelligence technology has ushered in a new era of possibilities.
To illustrate the disparity between tech powerhouses and the rest of the industry, consider the performance of the Invesco QQQ Trust Series 1 QQQ, a tracker of the Nasdaq-100. As of now, it has seen a remarkable 51% increase this year. Similarly, the equal-weight version QQQE boasts a respectable 31% gain.
In the realm of tech-focused exchange-traded funds (ETFs), the Roundhill Magnificent Seven ETF MAGS has garnered significant attention since its establishment in April. Notably, it has already amassed a 33% growth since inception, although it falls behind the performance of the equal-weight Nasdaq-100 in December.
AI Monetization Boosts Tech Sector
Recent observations in the field have highlighted the positive impact of AI monetization on the tech sector. Companies such as Nvidia, Microsoft, Google, Datadog, and Palantir are experiencing a significant increase in AI use cases across both enterprise and consumer domains. The momentum continues to build, with Intel’s recent announcement of a new AI chip on Thursday.
The impact of AI is considered to be the most transformative technology trend since the emergence of the Internet in 1995. Despite this, many on Wall Street are still underestimating the potential of the AI market. It is projected that there will be a staggering $1 trillion spend on AI over the next decade, creating a lucrative opportunity for the chip and software sectors. Among the industry leaders, Nvidia and Microsoft stand out as key players.
Favored Tech Names
In light of these developments, our firm continues to favor certain tech names. These include Apple, Microsoft, Alphabet, Palo Alto Networks, Palantir Technologies, Zscaler, CrowdStrike, and MongoDB.
Apple: The Perfect Tech Pick
Apple continues to dominate the tech industry, making it our top pick. The upcoming iPhone 15 upgrade cycle is set to create a wave of success, extending into a strong holiday season that seems to be humming into Christmas week. Additionally, we are confident in the steady double-digit growth of Apple’s services business, which we estimate to be worth between $1.5 trillion to $1.6 trillion on its own.
With anticipation building around the iPhone 15 release, Apple enthusiasts are eagerly awaiting the company’s latest innovation. This year’s upgrade is expected to bring even more advanced features and improvements, captivating consumers and driving sales during the holiday season.
Furthermore, Apple’s services business continues to show remarkable growth, illustrating the company’s diversified revenue streams beyond hardware. The services business has evolved into a significant entity, with a valuation ranging from $1.5 trillion to $1.6 trillion. This substantial value showcases the immense potential and profitability that lies within the services sector for Apple.
As Apple maintains its stronghold in the tech market, investors and consumers alike can expect to witness a prosperous holiday season accompanied by exciting innovations and breakthroughs from this tech giant.