Apple (NASDAQ:AAPL), Salesforce (NYSE:CRM) and Microsoft (NASDAQ:MSFT) are still some of Wedbush Securities’ top picks for 2023 as earnings season starts this week, with the investment firm wondering how bad it will be.
In a note to clients, analyst Dan Ives said investors have a few key questions on their minds:
- What does the enterprise demand picture look like for 2023?
- With the macro uncertainty abound how much more tech layoffs will be on the horizon?
- Is cloud spending slowing down moderately or falling off a cliff with many tech bears yelling fire in a crowded theater?
- What does the China demand and supply chain story look like?
- Digital advertising headwinds, how bad?
“In a nutshell, our overall view is that tech spending is holding up much better than is being priced into these stocks and the upcoming earnings season with help clear the deck on 2023 numbers with management teams conservative tone across the board,” Ives wrote in the note.
Ives added that many on Wall Street are already expecting a cut of between 8% and 10% for estimates for 2023 in what would be seen as a “rip the band-off moment.”
With the recently announced layoffs from stalwarts such as Microsoft (MSFT), Alphabet (GOOG) (GOOGL), Amazon (AMZN), Salesforce (CRM) and Meta Platforms (META), Ives added these are the “first major step” towards the stabilization of the stocks.
“Over the last few weeks we have seen significant headcount cut reduction from stalwarts Salesforce, Microsoft, and Amazon which we ultimately view as a positive for the Street as investors want these management teams to get ahead of the storm and preserve margins and the bottom-line in this uncertain macro,” Ives explained.
Ives reiterated his prior view that tech stocks will be “up 20%” in 2023 and are “way oversold” at current levels.
On Sunday, it was reported that activist investor Elliott Management has accumulated a multibillion dollar investment in Salesforce (CRM).