You’re not alone, but there’s a good reason you keep hearing the same story from pundits across Wall Street and Main Street.
Tech soared in the first half of 2023, led by high-profile chip stocks and some analysts still think there’s room to run. In a tweet Tuesday, Wedbush managing director and senior equity research analyst Dan Ives projected tech stocks could rally another 12 to 15 percent in 2023.
We believe overall the tech sector will be up another 12%-15% in the second half of this year led by software/chip sector with Big Tech remaining the “torch bearer” for this tech rally continuing to heat up. AI Revolution is here-seeing first signs of spending. 1995 Moment 🐂🏆⛅️
— Dan Ives (@DivesTech) July 11, 2023
For context, the Nasdaq Composite is already up over 35% year to date as of Friday trading.
Despite the stellar gains from Nvidia, Advanced Micro Devices (AMD) – Get Free Report, Microsoft (MSFT) – Get Free Report and more, now isn’t the time to sleep on an opportunity to buy into a selloff.
In this sneak peek from the Action Alerts PLUS investing club, team member and former NYSE trader Stephen Guilfoyle explained why it’s critical to have software and chip stocks in a healthy portfolio going forward.
“Money has to go into cybersecurity and money has to go now. It has to go into generative artificial intelligence, because if you’re not in it, you’re going to be left behind. It’s probably going to be an expense for a lot of firms that will pressure margin, not improve margin right away. But if you’re not in it, I think it will be looked upon as surrender by your investors,” Guilfoyle said.
FULL VIDEO TRANSCRIPT BELOW:
J.D. DURKIN: In a tweet this week, our friend Dan Ives predicted a 1995 moment for big tech, at least in the second half of 2023, chip and software stocks driving the tech sector up another 12% to 15%, at least from current gains. First of all here, Sarge, do you agree? And if you do, how are you playing that?
STEPHEN GUILFOYLE: Yeah, I agree. And I’m still loaded for bear, just like Dan laid out. I follow Dan pretty closely. I like him a lot, as far as analysts go. My number two holding in terms of waiting is still Advanced Micro Devices. I’ve taken Nvidia out of my top 10 twice, making sales to finance my lifestyle and all that garbage. And it’s already back into top 10. So Nvidia, no matter how many shares I sell, it seems to climb back into my top 10 as far as weightings go. And Microsoft, which isn’t a semi name, but it is a high tech name, that’s my top exposure, top weighted name.
So I’m still heavily loaded for tech, although today we’re going to get some information out of the NASDAQ, on the NASDAQ 100, see how they’re going to run their special rebalancing. So that should have been a net negative for these magnificent seven or the big six out of the magnificent seven stocks because I’m not sure Meta is included in the rebalancing. But it really didn’t. It hurt when a headline came out. But the rest of the week, these stocks resumed their leadership positions.
So I’d be a little careful going into this afternoon if you’re an active trader in those names because those names, when the headlines come out about what they’re going to sell and what they’re going to buy or what they’re going to reduce and increase in terms of weighting and the funds that track the NASDAQ 100 will have to react to that, that probably will put some weight on the magnificent seven or so.
But other than that, I don’t know why you would want to cut back on investing in places where money has to go. And money has to go into the cloud data center. Money has to go into cyber security. And money has to go– now, it has to go into generative artificial intelligence because if you’re not in it, you’re going to be left behind. It’s probably going to be an expense for a lot of firms that will pressure margin, not improve margin right away. But if you’re not in it, I think it will be looked upon as surrender by your investors.