Apple, Microsoft, Palo Alto are Wedbush's top tech picks going into year-end
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Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Palo Alto Networks (NASDAQ:PANW) are investment firm Wedbush Securities' three top tech stock picks going into the end of the year.
Analyst Dan Ives, who has an outperform rating on all three companies, noted that as the second-quarter earnings season comes to an end, the tech sector performed "much better than feared," calling it a "major victory for the tech bulls," citing strength in enterprise spending, cloud budgets, consumer product demand and even digital advertising. 
"FAANG tech stalwarts and Redmond had solid earnings heard around the world (and the Street) as this key barometer of consumer and enterprise spending was a core catalyst for tech stocks in the green over the past month," Ives wrote in a note to clients.
However, Ives added that it is going to continue to be a bifurcated industry moving forward, with companies such as Snap (SNAP), ServiceNow (NOW) and others that see "incremental headwinds." He added that smaller tech companies with less stable business models will struggle over the next several quarters, but that is not going to stop what he calls "the 4th industrial revolution" and companies like Microsoft (MSFT), Apple (AAPL) and Palo Alto (PANW) are poised to benefit.
For Apple (AAPL), the issues related to China and the supply chain look to have peaked and the focus is now on iPhone 14 production and demand ahead of a likely September launch.
According to a Monday report from Taiwan's United Daily News, Apple (AAPL) has told iPhone 14 suppliers to boost production to 95M units, up from 90M.
Ives added that as many as 225M customers have not upgraded their iPhone in 3.5 years, "creating a strong pent-up demand story with iPhone 14 despite the darkening global macro backdrop."
Concerning Microsoft (MSFT), Ives believes that the growth trajectory of its Azure cloud computing platform going into fiscal 2023 "remains strong" and the company is still "in the middle innings" of transforming workloads to be on the cloud.
Palo Alto Networks (PANW) is expected to see a "massive tailwind" as it continues to shift to the cloud, with Ives noting it is "in the right spot at the right time" to benefit from this multi-year shift.
Some analysts have wondered whether advertising might be Apple's (AAPL) next big growth opportunity as it looks to boost its Services revenue.