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They argue that “transformational AI growth and stabilizing IT spending environment will create a massive tech rally heading into year-end in which we expect tech stocks to be up another 12%-15% in 4Q.”
Despite the perplexing macroeconomic and bond market conditions, compounded by the disconcerting geopolitical aftermath of the recent terrorist attack in Israel, the analysts maintain their conviction that the technology sector is robust and well-prepared for a forthcoming earnings season that will defy the skeptics.
The analysts said they are using the macro and Fed worries as a time to “double down on our bullish tech thesis….and NOT panic.”
They see tech stocks poised for robust growth, driven by AI, cloud, cybersecurity, and a digital ad rebound, overlooked by the market. Further, they anticipate 2024 Fed rate cuts, relieving the 10-year yield obsession, with a projected soft landing.
They are focused on generational AI growth and $1 trillion of tech spending over the next decade.
The analysts’ favorite tech names remain Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Palo Alto (NASDAQ:PANW), Palantir (NYSE:PLTR), Zscaler (NASDAQ:ZS), CrowdStrike (NASDAQ:CRWD), and MongoDB (NASDAQ:MDB).
They added that the AI cycle will have a profound effect on the consumer Internet, commencing with cloud service divisions like Amazon’s AWS and Alphabet’s GCP. Both AWS and GCP are integrating AI-capable chips and services into their offerings for their existing customer bases. In line with this trend, our top tech picks remain Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL), and Meta (NASDAQ:META).
