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The Zacks Analyst Blog Highlights Apple, Microsoft, Meta Platforms, Alphabet and NVIDIA
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For Immediate Release
Chicago, IL – January 24, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Apple Inc. (AAPL - Free Report) , Microsoft Corp. (MSFT - Free Report) , Meta Platforms Inc. (META - Free Report) , Alphabet Inc. (GOOGL - Free Report) and NVIDIA Corp. (NVDA - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Tech Shows Initial Signs of Revival, Trend Likely to Continue
Wall Street witnessed a broad-based decline in 2022 with the technology sector suffering the most. The technology sector, which enabled Wall Street to get rid of the coronavirus-induced short bear market and formed the new bull market, suffered owing to overvaluation, a high interest rate regime and tighter monetary control adopted by the Fed to combat a 40-year high inflation.
However, as we have entered 2023, a very early sign of a rebound in the technology sector is clearly visible. Of the three major stock indexes — month to date — the tech-heavy has gained 6.4% while the Dow and the S&P 500 have risen 0.7%, respectively. Year to date, of the 11 broad sectors of the S&P 500 Index, the Technology Select Sector SPDR (XLK) and the tech-laden Communication Services Select Sector SPDR (XLC) have rallied 5.5% and 10.7%, respectively. This trend is likely to get further momentum in 2023.
Peak Inflation Seems Behind Us
Peak inflation seems behind us. Less-than-expected inflation rates in October, November and December with respect to several measures have clearly indicated this. The University of Michigan Surveys of Consumers released on Jan 13 showed that the one-year inflation outlook slipped to a preliminary reading of 4.0% this month from 4.4% in December, the lowest reading since April 2021.
The Fed raised the benchmark interest rate 4.25% in 2022 to the range of 4.25 to 4.5%. Market is currently expecting the central bank to increase the interest rate maximum by 75 basis points in 2023. Some financial analysts are expecting the first rate cut to come in the last quarter of 2023 or in early 2024. On the other hand, the U.S. labor market remains resilient. The initial results of the fourth-quarter 2022 earnings were as disappointing as expected. Therefore, the Fed may reach its goal of a soft landing.
Technology is the Best Bet for the Long Term
Last year's meltdown of the technology sector was a temporary phenomenon. The fundamentals of this sector are rock solid. We must not forget that the growing demand for hi-tech products has been a catalyst for the sector in an otherwise tough environment. A series of breakthroughs in 5G wireless network, cloud computing, predictive analysis, Artificial Intelligence, self-driving vehicles, digital personal assistants and Internet of Things, has given a boost to the overall space.
The leading emerging markets of Asia, Latin America, Africa and some European countries are still way behind in using digital technology compared to the developed world. While mobile phone penetration is nearly 90% in these countries, a large number of people are still using phones with old features, since voice communication and not data serve most of their needs. Even those using smartphones, rarely utilize online digital features.
However, the outbreak of coronavirus quickly changed the lifestyle and lookout of these people. The countries that are more digitized have been able to minimize their losses during the pandemic. These are major lessons for other countries. Even those who are less inclined toward digital technology and online platforms, either because they have to learn using smartphones or tablets or due to fear of data theft, are now feeling the massive advantage of online platforms.
Tech is No Longer Overvalued
The technology sector suffered a massive humiliation in 2022. The Nasdaq Composite plummeted 33.1% year over year and 32.9% from its all-time high. On the other hand, the XLK and XLC are currently trading at a 20% and 30.7% discount, respectively, from their 52-week highs.
Technology behemoths like Apple Inc., Microsoft Corp., Meta Platforms Inc., Alphabet Inc. and NVIDIA Corp. are currently trading at 23.2%, 24%, 57.5%, 35.3% and 38.4% discount from their respective 52-week high levels. These five stocks currently carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 (Strong Buy) Rank stocks here.
These companies have a solid business model, globally claimed brand value and strong financial positions. A weak guidance for one or two quarters will not affect the share prices of these companies to a great extent.
On the other hand, these stocks were heavily shorted and have corrected significantly in the past year. A gradually declining inflation rate, a lower magnitude of interest rate hike and the possibility of a soft landing (without recession) of the U.S. economy will result in a sharp northbound movement of these stock prices.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights Apple, Microsoft, Meta Platforms, Alphabet and NVIDIA
For Immediate Release
Chicago, IL – January 24, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Apple Inc. (AAPL - Free Report) , Microsoft Corp. (MSFT - Free Report) , Meta Platforms Inc. (META - Free Report) , Alphabet Inc. (GOOGL - Free Report) and NVIDIA Corp. (NVDA - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Tech Shows Initial Signs of Revival, Trend Likely to Continue
Wall Street witnessed a broad-based decline in 2022 with the technology sector suffering the most. The technology sector, which enabled Wall Street to get rid of the coronavirus-induced short bear market and formed the new bull market, suffered owing to overvaluation, a high interest rate regime and tighter monetary control adopted by the Fed to combat a 40-year high inflation.
However, as we have entered 2023, a very early sign of a rebound in the technology sector is clearly visible. Of the three major stock indexes — month to date — the tech-heavy has gained 6.4% while the Dow and the S&P 500 have risen 0.7%, respectively. Year to date, of the 11 broad sectors of the S&P 500 Index, the Technology Select Sector SPDR (XLK) and the tech-laden Communication Services Select Sector SPDR (XLC) have rallied 5.5% and 10.7%, respectively. This trend is likely to get further momentum in 2023.
Peak Inflation Seems Behind Us
Peak inflation seems behind us. Less-than-expected inflation rates in October, November and December with respect to several measures have clearly indicated this. The University of Michigan Surveys of Consumers released on Jan 13 showed that the one-year inflation outlook slipped to a preliminary reading of 4.0% this month from 4.4% in December, the lowest reading since April 2021.
The Fed raised the benchmark interest rate 4.25% in 2022 to the range of 4.25 to 4.5%. Market is currently expecting the central bank to increase the interest rate maximum by 75 basis points in 2023. Some financial analysts are expecting the first rate cut to come in the last quarter of 2023 or in early 2024.
On the other hand, the U.S. labor market remains resilient. The initial results of the fourth-quarter 2022 earnings were as disappointing as expected. Therefore, the Fed may reach its goal of a soft landing.
Technology is the Best Bet for the Long Term
Last year's meltdown of the technology sector was a temporary phenomenon. The fundamentals of this sector are rock solid. We must not forget that the growing demand for hi-tech products has been a catalyst for the sector in an otherwise tough environment. A series of breakthroughs in 5G wireless network, cloud computing, predictive analysis, Artificial Intelligence, self-driving vehicles, digital personal assistants and Internet of Things, has given a boost to the overall space.
The leading emerging markets of Asia, Latin America, Africa and some European countries are still way behind in using digital technology compared to the developed world. While mobile phone penetration is nearly 90% in these countries, a large number of people are still using phones with old features, since voice communication and not data serve most of their needs. Even those using smartphones, rarely utilize online digital features.
However, the outbreak of coronavirus quickly changed the lifestyle and lookout of these people. The countries that are more digitized have been able to minimize their losses during the pandemic. These are major lessons for other countries. Even those who are less inclined toward digital technology and online platforms, either because they have to learn using smartphones or tablets or due to fear of data theft, are now feeling the massive advantage of online platforms.
Tech is No Longer Overvalued
The technology sector suffered a massive humiliation in 2022. The Nasdaq Composite plummeted 33.1% year over year and 32.9% from its all-time high. On the other hand, the XLK and XLC are currently trading at a 20% and 30.7% discount, respectively, from their 52-week highs.
Technology behemoths like Apple Inc., Microsoft Corp., Meta Platforms Inc., Alphabet Inc. and NVIDIA Corp. are currently trading at 23.2%, 24%, 57.5%, 35.3% and 38.4% discount from their respective 52-week high levels. These five stocks currently carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 (Strong Buy) Rank stocks here.
These companies have a solid business model, globally claimed brand value and strong financial positions. A weak guidance for one or two quarters will not affect the share prices of these companies to a great extent.
On the other hand, these stocks were heavily shorted and have corrected significantly in the past year. A gradually declining inflation rate, a lower magnitude of interest rate hike and the possibility of a soft landing (without recession) of the U.S. economy will result in a sharp northbound movement of these stock prices.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.