Apple, Microsoft favorite large-cap tech stocks at Wedbush as questions emerge whether tech can move higher
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Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) continue to be the favorite large-cap tech stocks at Wedbush Securities, and analyst Dan Ives believes tech as a whole can continue to move higher, even with the Fed becoming hawkish, a marked shift from the past several years.

In a note to investors, Ives said that growth rates will continue to justify earnings multiples, with $1 trillion in cloud spending coming, as the shift to the cloud in the enterprise "is unlike anything we have seen take place in the last two decades."
"We anticipate $1 trillion of spending on the cloud over the coming years with a massive investment cycle also focused on big data analytics, cyber security, AI, and 5G as part of this 4th Industrial Revolution," Ives wrote. "We estimate this upcoming spending cycle for 2022/2023 is 2x-3x above normalized levels for enterprises/governments and therefore will lead to an accelerated growth cycle led by software and chips looking ahead."
Apple (AAPL) shares are down more than 1% to $170.59 in pre-market trading, while Microsoft (MSFT) is down nearly 2% to $304.80.
Ives added a caveat that he believes that earnings multiples will shrink, but the underlying growth in the space is underestimated by Wall Street and that should "neutralize some of these perceived Fed tightening headwinds."
For Microsoft, which reports on January 25, Ives believes that only 43% of workloads are on the cloud, but that's likely to rise to 55% by the end of the year.
"We estimate only 43% of workloads are cloud driven today and poised to end 2022 at 55% with massive growth seen by the likes of cloud behemoths Amazon and Microsoft as well as Google, Oracle, and IBM further down the pecking order," Ives added.
In addition to Apple (AAPL) and Microsoft (MSFT), Wedbush highlighted some other stocks it likes including, adding Palo Alto Networks (NASDAQ:PANW) and Tenable (NASDAQ:TENB) to the Wedbush Best Ideas list on Tuesday.
Zscaler (NASDAQ:ZS), CyberArk (NASDAQ:CYBR), Tesla (NASDAQ:TSLA), Checkpoint (NASDAQ:CHKP), Pega (NASDAQ:PEGA) were also among those that were positively mentioned.
Loop Capital recently raised its price target on Apple (AAPL) to $210, tying a Wall Street high, on near-term iPhone strength.