From a note to Wedbush clients that landed on my desktop Friday:
The market/tech sell-off this morning on Covid variant fears found in South Africa we view as a clear buying opportunity given our bullish view of the tech sector set up into 2022.
Over the past 18 months our bullish tech playbook has been unchanged and any time we get 10-year yield spikes/variant fears/second wave worries we view this as a buying opportunity to own the tech secular winners. While we are seeing a return to normalcy, a semi-remote workforce environment we believe is here to stay which underscores our thesis that areas such as cloud, cyber security, 5G are robust tech spending areas into 2022.
We would own the secular winners in FAANG (Apple remains our favorite), cloud (MSFT, DOCU, NICE, PEGA favorites), cyber security (ZS, PANW, CYBR, SAIL, FTNT, TENB favorites), and 5G looking ahead. Our view is that while tech valuations appear stretched to many on the Street, importantly the growth prospects around cloud, cyber security, 5G, and the metaverse are unparalleled to any period of time we have experienced since covering tech stocks in 2000. We believe the chip shortage eases throughout 1H2022 which will further buoy the overall tech.
Maintains Outperform rating and $185 price target.
My take: Apple closed down $8.89 (5.4%) from Monday’s intraday high and $5.56 (3.17%) from its pre-Thanksgiving close. I bet there’s money to be made there, but by the time the markets open Monday it will already have been made.