Tech stocks are attractive again, deserves upgrade to 'overweight' -Truist's Lerner
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TECH STOCKS ARE ATTRACTIVE AGAIN, DESERVES UPGRADE TO 'OVERWEIGHT, - TRUIST'S LERNER
The recent market selloff sparked by weak U.S. employment has made the high-flying technology sector .SPLRCT a bargain again and merits an upgrade back to "overweight", according to Keith Lerner, Truist's co-chief investment officer.
Following an "extreme performance" by tech stocks in June, buoyed by investor euphoria over the growth prospects of artificial intelligence, the sector moved ahead of fundamentals on a short-term basis, Lerner says
That prompted a downgrade to "underweight" by Truist as the sector became "vulnerable to any bad news." "The bar for positive surprises became too high leading to a sharp rotation out of the sector," Lerner says.
However, tech stocks are now "modestly oversold" after a steep double-digit percentage selloff amid "indiscriminate selling" dragged the sector to its worst performance since 2002.
This downturn has made the sector attractive again, making it deserving of an upgrade back to "overweight", according to Lerner. "Our view is the risk/reward has improved for the tech sector and the secular story remains intact," he says.
"Moreover, in a cooling economic environment, we expect investors to come back to tech given some of the secular tail-winds stemming from artificial intelligence (AI) and its premium growth prospects."
(Chibuike Oguh)
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AI RALLY'S FIRST SETBACK "OVERDUE" - DWS CIO - CLICK HERE
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EUROPEAN SHARES TURN POSITIVE FOR THE WEEK - CLICK HERE
EUROPEAN STOCK FUTURES EDGE UP - CLICK HERE
TURBULENT WEEK ENDING ON A HIGH -CLICK HERE
"Magnificent 7" hammered in the last two weeks https://tmsnrt.rs/3SAdt2J
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