Tech layoffs will fuel a rebound, Wedbush analyst says. Apple is their pinnacle pick.
Salesforce is cutting its staff by 10%. Amazon is expanding its layoff
plan to include an additional 8,000 employees, bringing the total to just over 18,000
For Wedbush analyst Daniel Ives, the cuts are setting
the stage for what he calls "a tech rebound."
Tech stocks are coming off a miserable year. The benchmark Nasdaq
Composite Index fell 33%; Apple (ticker: AAPL) fell 26%
The use of losses has basically been three things: an exodus from bo
oming stocks to cost names for fear of recession, trouble over companies cutting IT
The reasons for his bullish outlook: the
wave of layoffs, the Fed's course for fee hikes and better IT spending prospects.
“We view [the headcount cuts] as effective down the road
as investors need those management groups to ride out the typhoon and hold margins
Ives pointed to Meta, the fb discerner. Shares are up 25% since Nov. 9
as CEO Mark Zuckerberg told staff he could cut more than 11,000 jobs.
As for the Fed, Ives speculated that the critical bank's
competitive rate hikes will ease over the summer, making buyers more bullish on the technology
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