‘Not a time to panic:’ Wedbush pounds table for tech trade amid global sell-off

U.S. technology stocks dropped sharply in premarket trading on Monday for a variety of reasons, including a crash in Japan’s Nikkei, Berkshire Hathaway (BRK.A) (BRK.B) slashing its stake in Apple (NASDAQ:AAPL) and increased fears of recession.

However, Wedbush Securities said the tech trade is likely to still continue, aided by artificial intelligence.

“In a nutshell…. This is not the time to panic on the tech trade, [it’s] the time to go bargain hunting for our top tech names after this panic sell-off,” Wedbush Securities analysts led by Dan Ives wrote in an investor note.

The firm reiterated its position that “massive sell-offs” like this in the past “have created the best long term opportunities” to own companies such as Microsoft (NASDAQ:MSFT), Apple, Nvidia (NASDAQ:NVDA), Salesforce (NYSE:CRM), Oracle (ORCL), Palo Alto Networks (PANW), Tesla (TSLA), Alphabet (GOOG) (GOOG) and Amazon (AMZN).

In addition, Wedbush said that it still sees a “soft landing” environment for the global economy, with the Fed set to have a “major cutting cycle” over the next 18 months, even as the carry trade of the Japanese yen gets unwound.

“This earnings season validated our bull thesis and field checks around the massive cloud build outs (MSFT, Google, Amazon) which all had strong cloud outlooks as the AI Revolution now hits its next gear of growth,” Wedbush added. “While we clearly get the worries/fears the US consumer is weakening (Amazon consumer softer print), Fed is late to the game, hard landing bear thesis returning….we focus on tech spending and the winners that will be front and center in this massive AI tech build out that is still in the 2nd inning of a 9 inning game.”