Wedbush: Take advantage of the pullback to buy Apple and Microsoft shares

Wedbush analyst Daniel Ives likens the recent stock market to a “dizzying Space Mountain-like roller-coaster ride,” but he sees an opportunity in Apple and Microsoft.

The question is how deeply the COVID-19 shutdowns-induced slide lasts before a recovery.

stock chartTeresa Rivas for Barron’s:

Although “fears of a second wave will get the bears to come out of hibernation mode, we view this is another opportunity to buy the secular tech winners for the other side of this dark valley,” he wrote.

That’s not to say that there won’t be more days like Thursday to contend with. Until there’s an effective treatment or a vaccine, risks remain, and investors’ appetite for that risk will wax and wane.

Still, Ives believes that investors should take advantage of the pullback to buy Apple (AAPL) and Microsoft (MSFT). He says they are the tech stalwarts best positioned to weather the storm — and thrive from the new normal.

He reiterated his thesis that Apple will benefit as more people upgrade their smartphones as 5G technology is introduced. Ives also argues that Microsoft’s Azure is gaining ground on Amazon.com’s (AMZN) Amazon Web Services in the cloud-computing business.

MacDailyNews Take: Microsoft is not nearly as well-positioned as Apple, but Apple’s continued reliance on China assembly is a factor that Cupertino will have to address beyond just tinkering around the edges.

That said, here’s to mitigating risk by finally diversifying production! TGIF and cheers, everyone!

4 Comments

  1. It was less than 2-weeks ago you could have purchased the bankrupt car rental company/Hertz and made 582% on your investment (.81 purch/$5.53 sell).

    It may resurface as a “buy” if they get the bond backing they’re seeking. Not for the faint of heart…mainly for the Robin-hooders.

  2. Saying Microsoft isn’t as well-positioned as Apple doesn’t make much sense. Big investors are betting far more on cloud services than Apple hardware. Wall Street is constantly praising any company with cloud services for providing unlimited gains to investors. Wall Street obviously gives any cloud business company a far higher P/E than what Apple is getting. Microsoft is still the go-to company for enterprise software. Microsoft certainly has a higher institutional investor percentage than Apple by a large margin. I’m still trying to figure out what LinkedIn is doing for Microsoft and why it was considered such a great acquisition for $26B. It surely added to Microsoft’s value and shareholders seem to be happy with it.

    Let’s see what Apple acquires for even a couple of billion dollars and there will be all sorts of moaning and groaning about how Apple is throwing away money. Not that Apple is going to acquire any major company as it would rather continue buying back shares and I’m not sure many shareholders are finding that exciting enough.

    Apple should have left Microsoft in the dust after Microsoft blew all that money on Nokia and its whole mobile initiative, but Microsoft made an extremely quick transition to the cloud and Wall Street didn’t even blink at the loss. Everyone jumped right on Microsoft because the “cloud” became a huge Wall Street buzzword while the iPhone became a smartphone lost in a sea of smartphones. However, Wall Street didn’t quickly take to Apple’s gradual move to Services. It’s weird how things work for some companies and not for others.

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