Microsoft, Apple remain top picks as tech turns into 'have and have nots,' Wedbush says
Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) are still the top picks in the technology sector, Wedbush Securities said, as the sector turns into a "have and have nots" amid investors' worries about rising inflation and the Federal Reserve raising rates.
Analyst Dan Ives noted that the "brutal" sell-off of 2022 has surprised him, as tech stocks have seen their earnings multiples "fall off a cliff" on fears of a recession and the Fed stopping quantitative easing and starting to shrink its balance sheet later this year. While some believe it may be "goodnight" for tech stocks, Ives, however, feels differently.
"We could [not] disagree more as we remain steadfastly bullish on the tech sector during this market storm," Ives wrote in a note to clients.
Microsoft (MSFT) and Apple (AAPL) shares were each down less than 0.5% in premarket trading.
In addition to the aforementioned companies, Ives said the cyber security sector is likely to continue doing well, with Palo Alto (PANW), Zscaler (ZS), Tenable (TENB), Fortinet (FTNT) and CyberArk (CYBR) the firm's favorite names. 
The shift to the cloud is roughly 40% complete, Ives added, and that continued transformation is likely to benefit Microsoft, Amazon (AMZN), Google (GOOG) (GOOGL), Salesforce (CRM) and Oracle (ORCL), Ives explained. 
However, the companies that have become the "have nots," those that benefited during the height of the COVID-19 pandemic, have seen their growth rates slow significantly, with Ives downgrading DocuSign (DOCU) to underperform from neutral.
Ives also downgraded Matterport (MTTR) to neutral from outperform, noting its "high exposure to the real estate vertical" and C3.ai (AI) to neutral from outperform, due to the "slower backdrop for bigger enterprise AI deals in the year ahead."
On Monday, Berkshire Hathaway (BRK.A) (BRK.B) Chairman Warren Buffett said he bought $600 million worth of Apple (AAPL) shares during the first-quarter sell-off.




Lisa Maree Williams/Getty Images News