In a time of heightened market volatility, it is crucial for investors to carefully select where they put their money. The recent spike in the CBOE Volatility Index to 66 during the August 5 selloff, fueled by concerns over the U.S. job market and consumer spending, has left many jittery about the future. This volatility has had a significant impact on tech stocks, with the S & P 500 Information Technology index and the Invesco QQQ Trust both experiencing declines of more than 4% in the past month. This comes after a strong first half of the year for the tech sector, highlighting the need for a strategic approach to investing in technology companies.
Amidst this volatile market environment, Bernstein has identified a basket of its seven best technology, media, and telecommunications stock ideas that show promising upside potential. These stocks have a median upside of 26% to Bernstein’s price targets, signaling a bullish outlook on the selected companies. Some of the key tech picks highlighted by Bernstein include Uber, Dell, and Broadcom.
Uber has emerged as a dominant player in the rideshare and delivery space, with Bernstein citing a promising outlook for the company. The firm sees a significant turning point in EBITDA for Uber, with a projected 40% compound annual growth rate from 2023 to 2026. Additionally, the “wave of consumers leaning into convenience” is seen as a catalyst for the tech company’s growth. Despite a 17% increase in share price this year, Bernstein remains bullish on Uber, with an outperform rating and a target of $95, implying a 31% upside from the current price.
Dell is another standout tech pick by Bernstein, with the stock climbing over 45% in 2024. The firm’s price target of $155 suggests a 39% upside from the current price, reflecting strong confidence in Dell’s future prospects. Bernstein believes that Dell’s AI server orders are likely to remain robust, with anticipated revenues of $12B+ compared to $1.4B last year. Additionally, there is optimism around improving profitability in Dell’s Infrastructure Solutions Group, driven by cost-cutting measures and enhanced storage margins. The cyclical rebound in PCs and AI offerings further add to Dell’s growth potential.
Broadcom is another tech stock that has garnered attention from Bernstein for its promising outlook. While the specifics of Bernstein’s analysis on Broadcom are not provided, the recommendation indicates confidence in the company’s performance and growth prospects. As an established player in the tech industry, Broadcom’s inclusion in Bernstein’s list of top tech picks underscores the company’s strength and resilience in a volatile market environment.
Navigating a volatile market requires a well-thought-out investment strategy, especially when it comes to tech stocks. Bernstein’s selection of key tech picks provides investors with valuable insights into companies with strong growth potential and favorable upside. By considering these recommendations and conducting further research, investors can make informed decisions to capitalize on opportunities in the ever-changing tech landscape.