Wedbush analysts believe the tech universe is resilient and is poised for a strong earnings season ahead that will prove the doubters wrong.
"Our view is that 3Q earnings over the coming weeks will be an eye opener for the Street as the 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," the analysts wrote.
Their view of tech stocks is that the transformational growth around AI, cloud, cyber security, and rebound of digital ad dollars will create a "springboard" of growth into 2024.
Analysts at Wedbush noted their favorite tech names remain Apple Inc (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Palo Alto Networks Inc (NYSE:PANW), Palantir Technologies Inc (NYSE:PLTR), Zscaler Inc. (NASDAQ:ZS), Crowdstrike, and MongoDB Inc (NASDAQ:MDB), as they focus on what they called this "generational" AI growth and $1 trillion of tech spending now on the horizon over the next decade.
They believe the impact of the AI cycle on consumer internet will be "massive" and it will start with the cloud service divisions, Amazon’s AWS and Alphabet’s GCP.
"The macro story is overshadowing the biggest technology revolution in the last 30 years with AI a '1995 Moment' and we believe the fundamental tech growth stories/use cases are accelerating and will be front and center in 3Q earnings season over the coming weeks," the analysts added.
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