Apple top buy at Wedbush as Fed gives 'bright green light' to buy oversold tech
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Apple (NASDAQ:AAPL) is still the top tech stock to own at Wedbush Securities after the Federal Reserve gave what the investment firm called a "bright green light" to own oversold tech stocks after it raised interest rates on Wednesday.
In a note to clients, analyst Dan Ives said that with the rate hike, along with expectations that six more rate hikes are coming this year and three in 2023, now is the time to own oversold tech stocks as investors feared the worst from the central bank, adding that the bottom is "now likely in for the year."
Ives said the Fed's decision "takes the uncertainty and overhang away from the tech sector," as Wall Street now knows the "clear path ahead on rates."
"In a nutshell, we believe the tech sector is as oversold as we have seen in the last five years," Ives said, adding while Apple (AAPL) is Wedbush's "clear favorite", companies in the cloud, software, cybersecurity and semiconductor sectors are one the brokerage would "strongly be buying" now.
Apple (AAPL) shares were down roughly 0.5% to $158.69 in early trading, while some of the other tech stocks that Ives mentioned, including Microsoft (MSFT), Oracle (ORCL), Adobe (ADBE) and Salesforce (CRM) all remained just above or below their breakeven points for the day.
Ives noted that the digital transformation theme that has played out over the past couple years as a result of the pandemic is "gaining more steam" this year, citing enterprise checks and investors have "sold the tech sector indiscriminately across the board."
Aside from the aforementioned tech stocks, Ives also said that the cybersecurity sector is "poised to surge," noting that there has been an "elevated" number of cyberattacks due to the Russian invasion of Ukraine.
As such, companies like Palo Alto Networks (PANW), Zscaler (ZS), CrowdStrike (CRWD), Tenable (TENB), Varonis (VRNS), Fortinet (FTNT), CyberArk (CYBR), Palantir (PLTR), Check Point (CHKP) and SailPoint (SAIL) are poised to benefit.
On Monday, Morgan Stanley said Apple (AAPL) would only see a "minimal" impact from Foxconn shutting its Shenzhen, China plant. Yesterday, however, Foxconn said it would restart production at its Shenzhen operations on a limited basis.