High-growth tech stocks have come under pressure in recent months as investors anticipate the Federal Reserve hiking interest rates, reducing bond buying and trimming the nearly $9 trillion in assets it’s holding.
Neuberger Berman’s Daniel Flax says a lot of the names in the tech space have become oversold and he sees opportunities to buy.
“We see a lot to like at current levels in the sector,” Flax said Wednesday on CNBC’s “Squawk Box.”
The same underlying drivers of the tech space remain in place, Flax said, pointing to continued innovation and growth in the buildout of digital infrastructure.
Flax highlighted the durability of Microsoft Corp’s platforms like Azure. The company on Tuesday announced that cloud services revenue increased by 29 percent, driven by Azure.
Apple Inc is scheduled to announce its fourth-quarter financial results after the market closes on Thursday.
Flax acknowledged that supply chain constraints will remain a factor for Apple, but he expects to see a continued broadening of the company’s revenue drivers. iPhone remains very healthy, he said, adding that he also expects to see continued growth in services and wearables.
Looking out to next week when Amazon.com Inc reports quarterly results, Flax said he expects more of the same.
He noted that the company’s e-commerce business will face tough comparables given the strength of the business during the pandemic, but he thinks the Amazon Web Services business “remains very robust.”
Alphabet Inc is set to announce its fourth-quarter results next week as well.
The Google Cloud platform, which focuses on enterprise customers, remains healthy, and YouTube and search both remain very strong, according to Flax.
“We’re buyers of these names here right now,” Flax said. “We see opportunity over the next one to two years.”
If growth and earnings come in above expectations, he told CNBC that he thinks these stocks can outperform the market “even in an environment where you see lower multiples.”
By Adam Eckert
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