Apple, Microsoft top picks at Wedbush as firm says Powell set stage for 'bottoming process' in tech
After the Federal Open Market Committee raised its key interest rate 50 basis points and Fed Chair Jerome Powell held a press conference that seemed to soothe investors' nerves, Wedbush Securities analyst Dan Ives said the events "should start this bottoming process for the tech sector."
In a note to clients, Ives noted that companies like Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Palo Alto Networks (NASDAQ:PANW) and Tesla (TSLA) are the firm's top picks, and with a "somewhat clearer path" from Powell, tech stocks may start to move higher, albeit with some volatility.
"As we are learning firsthand from earnings season so far this quarter it's a 'fork in the road' tech sector," Ives wrote in the note, adding that tech segments such as enterprise spending, semiconductors, software and cyber security are "holding up extremely well."
Both Apple (AAPL) and Microsoft (MSFT) shares fell nearly 1% in premarket trading on Thursday. 
While China's COVID-related lockdowns are hurting Apple (AAPL), Tesla (TSLA) and other tech companies in the near-term, global demand is still "strong."
Conversely, e-commerce companies and those that benefited from the work-from-home trend, such as Netflix (NFLX), Zoom (ZM) and DocuSign (DOCU), are seeing their growth slow.
In addition to the aforementioned companies, Ives highlighted Oracle (ORCL), Adobe (ADBE) and Salesforce (CRM) as top software stocks, while the shift to the cloud is likely to benefit Microsoft (MSFT), Amazon (AMZN) and Google (GOOG) (GOOGL) the most, with Oracle benefiting less than the other three companies.
Top names to own in the cyber security space include Palo Alto (PANW), Zscaler (ZS), CrowdStrike (CRWD), Tenable (TENB), Fortinet (FTNT), CyberArk (CYBR) and Palantir (PLTR), Ives explained, due in large part to "an elevated level of cyber attacks" coming from around the world.
On Monday, Berkshire Hathaway Chairman Warren Buffett said he bought $600 million worth of Apple (AAPL) shares during the first-quarter sell-off.