- Tech investors were tested Friday after reporting strong earnings from major earnings like Amazon, Facebook and Apple still being followed by plummeting stock prices.
- Selected traders focus on the prospect of quiet profit growth rather than a better-than-expected outcome of the past quarter.
- Despite the negative return on earnings in Friday trading, investors should stick with technology stocks, UBS said in a Friday note.
- The company comes up with three long-term technology topics that investors should focus on.
- Visit the Business Insider home page for more news.
Tech stocks rose Friday after major tech companies like Apple, Amazon, Alphabet and Facebook reported earnings for the third quarter.
While Alphabet shone and rose as much as 8% on Friday, Apple, Amazon and Facebook dropped significantly on Friday as investors weighed better than expected earnings reports with bleak prospects. and not sure for the next quarter.
The leading tech sell-off sent the Nasdaq 100 index down 3.4% on Friday afternoon, and Apple, Amazon and Facebook all fell at least 6%.
But according to a Friday note from UBS, investors should continue to invest in technology stocks over the long term, with the primary focus on three emerging technology themes.
According to UBS, this is what investors should watch out for over the long term in the tech sector.
Read more: ‘We’re in a slump’: A 35-year market veterinarian says more stimulus won’t work to stop the coronavirus-induced recession – and warns the stock. more things will fall. ‘
1. 5G tools and platforms.
According to UBS, Apple’s 5G iPhone lineup will act as a catalyst for wider 5G adoption.
“The new standard offers up to 20 times faster download speeds and 90% lower latency than 4G, enabling a myriad of emerging technologies over the next decade. Those who support 5G will benefit. from a projected 20-fold increase in annual 5G investment spending to $ 150 billion by 2025, from $ 7.5 billion in 2019. Those who benefit from 5G platforms, like game companies online, can reap more economic value thanks to the ultra-fast, extensive mobile connectivity, “UBS said.
2. China’s digital economy.
According to UBS, as economic tensions intensify between the US and China, China’s internet platforms can thrive because they are better placed to avoid tensions due to their less global integration and less dependency. more on US or third party suppliers.
“They also benefit from the digitization and pandemic-related user benefits. In the Chinese digital economy space, we like the names chosen in e-commerce. , food delivery, travel, search, cloud, data center, fintech and online entertainment platforms, ”UBS said.
Read more: ‘I’ll fundamentally grow long’: Billionaire investor Chamath Palihapitiya has made 997% returns since 2011. He details five areas that shape his long-term investment book.
3. The technology cycle.
According to UBS, when the world emerges after the COVID-19 pandemic, a cyclical recovery will be sustained. That is why investors should consider owning cyclical technology stocks in the semiconductor, memory and smart phone supply chain sectors.
“Asia’s smartphone supply chain channels show that component production lines are running at or near capacity by Q4,” UBS said, adding that the increase in ad spend Online is a boon for the average American internet names.
“So while we still prefer large cap technology, with fair pricing at current levels with expected earnings growth, to benefit from higher next steps in markets, they I think it is reasonable to diversify into other technology segments, “concluded UBS.
Read more: Steven Pesavento gave up a nine-year-old career to pursue real estate investing full time. Here’s how he went from someone with no tech experience to over 200 properties in a matter of years.