At this stage, the downdraft is comparable to other bear markets in history. And as dramatic as the declines have been, and as scary as the headlines are, it’s important for investors to look longer term at the market’s returns. However, holding a position in a diversified ETF tech fund could help limit the risk of going all-in on a single firm.

I’m not really sure that that’s going to be a big boom for investors. But I think that in a general sense when I think of drawing a circle around all the stocks that I see, the most promising, https://bigbostrade.com/ even healthcare stocks like Teladoc that are leveraging tech in the world of healthcare. You look at digital innovation and you look at the metaverse if you want to go into that part.

“As investors become more comfortable with a higher rate environment, yields on 10-year Treasuries may not need to fall back into the 3′s for longer duration assets to work,” Goldman Sachs wrote. Back to QualcommQualcomm shares jumped nearly 4% after the company said it will supply Apple with 5G modems for smartphones through 2026. Qualcomm’s CEO Cristiano Amon previously said Apple’s transitioning to an in-house chip from 2024. Apple contributed about 21% of Qualcomm’s fiscal 2022 revenue of $44.2 billion, according to a UBS estimate. Lending of exchange traded funds has accelerated over the past decade as these highly liquid index tracking vehicles have become widely adopted by US investors.

Upside risks for tech sector

The Fed has signaled that it may this year begin shrinking its balance sheet, which has swelled to around $8.8 trillion following its quantitative easing program during the pandemic. Under quantitative tightening, the Fed’s balance sheet could fall about $1.5 trillion by the end of 2023 and around $3 trillion by 2025, according to the Deutsche note, which cited projections from the bank’s economists. This year has been “a perfect negative storm for ether trader tech,” Deutsche Bank’s Jim Reid, head of thematic research, wrote in a note emailed Wednesday. He cited higher nominal and real yields as well as “a Fed that seems strongly committed” to starting quantitative tightening in 2022. The payments stock fell more than 75% at one point, but it’s since bounced back by nearly 50%. Growth has slowed, but with the stock still down, the valuation looks appealing at a price-to-earnings ratio of less than 25.

As the year progresses and markets start looking at 2022 earnings, some of the tech stocks seem to offer value and we would see a recovery in them. One further factor to consider is the prospect of China reopening in Q1. There had been some speculation in early Q4 on the back of a leaked (alleged) internal Chinese government memo alluding to a planned March date for reopening the Chinese economy. We saw plenty of initial equities upside, particularly in tech, in reaction to this.

Borrowing demand for UK gilts increased significantly during the crisis that destabilised parts of the country’s pension sector last year. UK government bonds generated $182.4mn for lenders in 2022, an increase of 45 per cent on the previous year. We’d like to share more about how we work and what drives our day-to-day business. “A lot of the current performance is really the result of unwinding their excess performance,” Sosnick says.

• The company has continued to invest aggressively in cutting-edge technologies like artificial intelligence.
• Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
• After declining for a year, Pinterest’s user base seems to have stabilized, as it was flat in the most recent quarter at 433 million monthly active users.
• Still, traders might not need to worry about yields hitting an eye-opening 7%, going by a report in the Wall Street Journal.

On the date of publication, Louis Navellier had a long position in NVDA. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. Second-quarter results were even better than analysts expected, with revenue of nearly $32 billion and EPS of $2.98. Earnings for the second quarter were just as impressive as Q1. Revenue was $13.51 million, which up from $6.7 billion a year and up 88% from Q1. Nvidia is the chip manufacturer that’s responsible for many of the chips used to power generative AI.

Netflix, Facebook parent Meta, and Twitter have also seen bigger hits to their share prices in this latest round of sell-offs than what occurred in the early days of COVID. The light-colored red line in the chart measures the share sell-off during the epic February-March 2020 sell-off. The darker red line above measures the Round Two carnage, calculated as the share-price performance of these stocks since their most recent all-time high and Friday’s closing price. While the Fed isn’t done raising interest rates, the strong results of the companies listed here should help reassure investors that these stocks can outperform in the long run, even in the event of a recession. For much of the past decade, stocks of technology-related companies drove the overall markets skyward.

While this story was promptly put down by Chinese authorities, subsequent events have thrown the China reopening story back into the limelight. On the back of recent protests across China, the government has begun scaling back many covid restrictions, for the first time since the pandemic took hold. The trajectory of these actions is fuelling speculation that the government is indeed looking towards a full reopening of the Chinese economy.

Why Were Tech Stocks Down In 2022—And How Long Will The Slump Last?

However, investors seeking out the best tech stocks should not give up on Kyndryl. First of all, being independent from IBM is a major advantage. This allows the company to take an agnostic approach to the technologies it recommends to customers. This not only means better results – but it also attracts more customers. Kyndryl estimates that the spinoff has expanded its market opportunity from $240 billion to $510 billion. Towards the end of 2020, once we learned a COVID-19 vaccine was ready for the masses, Wall Street began to warn investors of a new markets dynamic.

Tech companies by nature are looking for innovative ways to do things or bring new technologies to market. However, while the near-term implications look skewed to the downside, there are some encouraging perspectives its worth considering here. The first is that the Fed has clearly set out its stall for 2023. The focus remains firmly on inflation and with that, comes some upside risk for the tech sector. If inflation continues to cool at the current pace or quicker, markets are likely to move sharply higher as traders begin pricing in a quicker end to the Fed’s tightening cycle.

The software-as-a-service provider generates a mountain of cash, too, with free cash flow on pace to represent nearly 40% of sales in fiscal 2024. The spike in bond yields also hit tech stocks more than cyclical names. A lot of tech stocks have their earnings skewed towards the future and an increase in long-term bond yields makes future cash flows less attractive in current dollar terms. These headwinds included a Fed intent on aggressively raising interest rates to bring down stubbornly high inflation.

Your investing journey is unique, and so are your investment goals and risk tolerance levels. This is precisely why we designed our marketplace service – “The Quantamental Investor” – to help you build a robust investing operation that can fulfill (and exceed) your long-term financial goals. At November’s FOMC meeting, the FED raised rates by another 75 bps to 3.75-4%, and the projected hike for the December meeting now stands at 50 bps (with recent CPI prints showing signs of cooling down in inflation). It’s no secret that investing, especially during a recession, is hard.

There was also a near shutdown of the initial public offering (IPO) market, as well as a spate of awful layoffs. All of this led to significant share-price declines across the technology sector, including for many of Wall Street’s best tech stocks. As has been widely noted in recent months, technology stocks and growth-stock companies in general have been seen as the group most vulnerable to the rise in rates. That’s because a key aspect of stock valuations is estimating the present value of a company’s future earnings.

How Apple performs has great consequence for the market because it’s the most valuable stock on Wall Street. That means its movements pack more weight on the S&P 500 and other indexes than any other stock. A rally for Big Tech stocks Monday helped Wall Street claw back about half its loss from last week. The InvestorPlace Research Staff member primarily responsible for this article had a long position in PLTR. The staff member did not hold (either directly or indirectly) any other positions in the securities mentioned in this article.

Key factors driving tech stocks

The idea is to treat this list as a basket-based approach to buying the crash. NVDA stock is up 216% this year and that’s even after a pullback in the last two weeks, but this stock price is destined to hit $500 and more. Earnings were solid for the company, which sells custom data analytics software, helping companies analyze data to make decisions.

With that goal in mind, let’s look at two tech stocks that can thrive during recessions while maintaining attractive long-term growth outlooks. Read on for some good reasons to add Microsoft (MSFT -1.83%) and Palo Alto Networks (PANW -2.93%) stocks to your recession watchlist. In addition to being one of the best tech stocks to buy, Fortinet is also one of the best AI stocks to watch going forward. The company has continued to invest aggressively in cutting-edge technologies like artificial intelligence. This is the role of Fortinet FortiGuard Labs, whose systems analyze over 100 billion events daily for real-time threat intelligence.

Bitcoin ETF would be a win for BlackRock — but maybe not for crypto investors

One reason that tech stocks fell is that the Federal Reserve began raising interest rates. Tech companies and startups relied on the cheap money that interest rates of almost 0% provided. It looked like nothing could go wrong for tech stocks until about the end of August 2020.

One thing to consider is that tech isn’t a monolithic entity. It includes ecommerce, cybersecurity, social media and dozens of other industries. It said it will remove up to 700 engines for shop visits in the next few years. Apple rose 0.7% ahead of a Tuesday event where it’s expected to release its latest iPhone model.

A few darlings of the Reddit crowd—Robinhood, AMC Entertainment and Bed Bath & Beyond—are down 86%, 75% and 69%, respectively, off their all-time highs. The Trade Desk blew expectations away in its latest quarterly earnings report, showing off strong revenue growth and profitability once again. After declining for a year, Pinterest’s user base seems to have stabilized, as it was flat in the most recent quarter at 433 million monthly active users. Meanwhile, the company remains highly profitable despite the recent headwinds. In the second quarter, it posted $92 million in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), or a 14% margin.

Top Tech Stocks to Buy During a Recession

Periods of declining or slower-growing inflation have seen better relative results for the sector. Get this delivered to your inbox, and more info about our products and services. I think we might be seeing a little bit of a shift back to some of those slower growth value-oriented stocks.