Reply To: Traders Market Weekly: Embrace the Chaos in 2023


Wedbush 2023 Picks

“We believe overall the tech sector will be up roughly 20% in 2023 from current levels with Big Tech, software, and semis leading the charge despite the macro and Fed wild cards abound,” analyst Dan ives wrote in a note to clients.

In coming up with themes for next year, Ives noted that it’s likely to be a “choppy, yet bullish tech tape” for companies that are well positioned, as the Federal Reserve starts to slow down interest rate hikes, but weakness in the global economy continues.

Apple (NASDAQ:AAPL) is still the firm’s top pick heading into 2023, even as the company has dealt with supply chain disruptions stemming from China’s zero-COVID policies. As the country moves away from that strategy, it’s possible that Apple (AAPL) will get its supply chain back on trackd and the demand for its highly popular iPhone 14 Pro and iPhone 14 Pro Max gets fulfilled.

There looks to be early signs of that, as investment firm UBS recently said there was evidence of improving iPhone 14 wait times in both of Apple’s (AAPL) key markets, the U.S. and China.

Ives also noted that other areas of tech spending should be relatively strong in 2023, including the cloud, software and cyber security, even as a great number of Wall Street models have already factored in “a very uncertain macro [environment] over the next 6 to 9 months,” Ives explained.

In cloud computing, Ives highlighted Microsoft (NASDAQ:MSFT) and Salesforce (NYSE:CRM) as being well positioned going into 2023, even as both companies have recently laid off employees on worries of slowing growth.

Palo Alto Networks (PANW), CyberArk (CYBR), CheckPoint (CHKP) and Zscaler (ZS) were highlighted as the top cyber security names.

Ziff Davis (ZD), NICE (NICE), Alight (ALIT) and Planet Labs (PL) were highlighted as some “under the radar” stocks that fit the “growth as a reasonable price” mantra.

Ives also said that he expects M&A activity to rise next year, as valuations have come, the Fed is nearing the end of its rate hikes and growth could remain resilient, even in the face of a weaker global economy.

As such, companies like Cerence (CRNC), Varonis (VRNS), Tenable (TENB), Progress Software (PRGS) and Qualys (QLYS) could be acquisition targets.