After the U.S. Federal Reserve turned more hawkish and announced it will do whatever it takes to fight rising inflation, the markets rallied.
Many were left puzzled by the strong response in the markets as higher rates tend to negatively impact earnings, but Wedbush analyst Dan Ives says it makes a lot of sense.
“I think it’s a bright green light to own tech stocks here,” Ives said Thursday on CNBC’s Squawk Box.
The Fed “ripped the Band-Aid off” and laid out a clear path for rate hikes, which took a lot of the uncertainty out of the markets, Ives explained.
He told CNBC that tech stocks are the most oversold he has seen in five years.
Ives said software and cybersecurity stocks are good places to look for buying opportunities. Some of his top picks are mega-cap tech names, specifically Apple Inc., Microsoft Corporation, and Alphabet Inc.
“I believe the bottom for tech is likely in here so we’ve been advising our investors here to own the high-quality tech stocks,” Ives said.
His top pick remains Apple. Ives expects investors to look back at this correction as a golden buying opportunity, he said.
“Now with the Band-Aid ripped off, we believe tech stocks from here could be up 25 percent rest of the year,” he said.
By Adam Eckert
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