Need to Know: Buy this dip in Apple, Microsoft and these other tech stocks before they’re out of reach, says analyst

“The risk-off trade for tech has been a painful one for tech investors this week as worries around high valuations, bubble fears, rotation trade, rising yields and a focus on reopening plays take center stage,” Ives said. 

But, according to Ives, the digital transformation is just getting started and will last a number of years among companies in cloud, cybersecurity, e-commerce and 5G. These subsectors are the life of the tech party, with consumer and enterprise demand catalyzing a “multiyear growth boom” ahead, the analyst said. 

Though collaboration-software companies like Zoom ZM, +1.28%, Teams, Slack WORK, -1.17%, and Citrix CTXS, +0.69% will see “moderating growth” into 2022, many chief executives have told Wedbush that 30% to 40% of employees could remain working remotely in some form. This will prompt companies to “rip the Band-Aid off and go aggressive” with cloud transformations, Ives said.

See: Analysts say Zoom can continue to thrive in a vaccinated world

Investors should use the current market weakness to ensure that Apple AAPL, -0.65%, Microsoft MSFT, +0.02%, DocuSign DOCU, -3.14%, Zscaler ZS, -3.27%, Palo Alto PANW, -1.69%, SailPoint SAIL, -3.01% and Nuance NUAN, -2.55% are included in their portfolios, Ives advised.

Across the wider sector, Wedbush predicts that tech stocks will move at least 25% upward in the next year. That will be driven by big names Facebook FB, +0.47%, Amazon AMZN, +0.10%, Apple, Netflix NFLX, -0.45% and Google parent Alphabet GOOG, +0.16% GOOGL, +0.13%, as well as cloud and cybersecurity stocks, despite the recent selloff, Ives said.

More broadly, Ives said that Uber UBER, -2.17% and Lyft LYFT, -1.80% — “disruptive tech recovery names” — remain Wedbush’s favorite “reopening plays,” with profitability on the horizon and a massive surge in food delivery.

Don’t miss: Lyft stock surges toward highest prices since 2019 after best week for rides of the pandemic

And while tech regulation is a long-term risk, “it still remains a Goldilocks environment for tech stocks with the Biden administration,” according to Wedbush. Ives sees President Joe Biden as likely to ramp down tensions in the “Cold Tech War” brewing between the U.S. and China, as well as encourage cybersecurity initiatives.

Market bears will come out of hibernation to warn investors that the tech boom and bull rally is over, Ives said. Wedbush believes this is “a golden opportunity to own the secular tech winners for the next 12 to 18 months at compelling valuations given some of these selloffs.”

The buzz

The House of Representatives wrapped up the week after police discovered a QAnon-linked militia plot to attack the Capitol, but that didn’t stop major legislation late on Wednesday. House Democrats advanced the largest overhaul of U.S. election law in at least a generation to the Senate, alongside a bill to overhaul policing, named for George Floyd, who was killed during an arrest in May 2020.

On the economic front, initial jobless claims are the headline figure. 745,000 Americans filed for unemployment last week, slightly less than the 750,000 expected but an increase from 730,000 the week prior. There were 4.3 million continuing jobless claims in the week of Feb. 20, down from 4.42 million in the week before that. Factory orders for January are also due this morning, before Federal Reserve Chair Jerome Powell speaks at The Wall Street Journal Jobs Summit at noon.

SpaceX’s Starship — a prototype for a future Mars mission — looked like it aced a landing to make founder Elon Musk proud. But just minutes after the touchdown was declared a success, it exploded with so much force that it went skyward again. And there is a video.

The CEO of Texas’ power grid has been fired. The grid suffered a fatal failure in a freezing February that left millions without heat or electricity for days in one of the worst blackouts in U.S. history.

The European Medicines Agency, the drug regulator for the European Union, has started a review of the Sputnik V COVID-19 vaccine developed in Russia.

The Competition and Markets Authority, the U.K. competition regulator, is investigating Apple over the terms and conditions governing developers’ access to the App Store.

The online Indian retailer Flipkart, mostly owned by Walmart WMT, +0.82%, is considering a U.S. listing through merging with a special-purpose acquisition company, or SPAC, according to a report from Bloomberg that said the company could seek a valuation of at least $ 35 billion.

The markets

Stocks opened slightly higher DJIA, -0.09% SPX, -0.42% COMP, -1.15% after a big slide on Wednesday. European stocks UKX, -0.82% DAX, -0.49% PX1, -0.25% are broadly down after three straight days of gains while major Asian indexes NIK, -2.13% HSI, -2.15% SHCOMP, -2.05% all fell more than 2%.

The chart

If you think bonds have been bumpier than usual…you’d be right. Our chart of the day, from Marshall Gittler at BDSwiss, shows just how volatile the Treasury market is right now. Gittler charts the MOVE index, which is like the bond market version of the VIX index for stocks. Volatility in stocks is near normal while foreign exchange is a little calmer than usual.

Random reads

Tahltan woman from Northern Canada bakes moose head that looks fierce, tastes phenomenal, and feeds a family.

A passenger flight turned around in Sudan when a stowaway cat attacked the pilot.

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