Microsoft, Apple, others may benefit as tech readies for 'modestly better' earnings
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Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN) and a host of other tech stocks may be beneficiaries as the sector gears up for what Wedbush Securities sees as a "modestly better" earnings season.
Analyst Dan Ives noted that tech stocks have held up well so far this year, outperforming the broader market as investors have flocked to them amid turmoil in the banking sector, the broader global economy and concerns about a recession. With recent channel checks showing a "more stable IT spending environment," including improvements in cloud computing, a number of tech stocks may be beneficiaries. 
"While a cautionary environment is the catch phrase across many enterprise sales cycles and the banking crisis over the last month has naturally caused some more white knuckles, overall IT spending has been generally resilient and thus speak to our belief that 1Q earnings season will be a positive catalyst for tech stocks," Ives wrote.
Seeking Alpha contributor Julian Lin also highlighted the recent strong performance from tech stocks, adding the results are "no fluke" and "not a bubble."
Cloud computing and cyber security budgets have proven to be "much more resilient" than Wall Street expected, Ives added and are thus likely to benefit large-cap stocks like Microsoft (MSFT), Amazon (AMZN) and Google (NASDAQ:GOOG) (GOOGL). 
Other expected beneficiaries include cyber security companies Palo Alto Networks (PANW), Check Point Systems (CHKP), CyberArk (CYBR), Tenable (TENB), Zscaler (ZS) and CrowdStrike Holdings (CRWD), along with Datadog (DDOG), Salesforce (CRM) and MongoDB (MDB) in the cloud space.
Additionally, the issues in the financial sector are likely to keep a lid on the Federal Reserve and interest rates, Ives added. 
"With a 10 year [yield] that has likely peaked, the green light on the risk-on trade is underway and just starting in our opinion with valuations still compelling on the beaten down tech sector," Ives posited.
In addition, Ives noted that with massive cash balances, strong free cash flow and the significant round of layoffs by a number of companies, fundamentals are strong and there may be a "massive" round of acquisitions coming in short order, Ives predicted.
On Tuesday, Apple (AAPL) officially released its Buy Now, Pay Later service in the U.S. after a series of technical challenges delayed the launch for months.