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.
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!