Wall Street Analyst Predicts End To Tech Rout: 'Much Of The Selloff May Be In The Rearview Mirror'
Portfolio Pulse from Piero Cingari
Wall Street analyst Ed Yardeni suggests that the recent tech stock selloff may be over, despite disappointing earnings from Alphabet and Microsoft. The Nasdaq 100, tracked by Invesco QQQ Trust, fell 2.7%, while the Roundhill Magnificent Seven ETF declined by 1.9%. The iShares Semiconductor ETF dropped over 7%. Yardeni highlights that some tech stocks, like Nvidia, Meta, and Netflix, still offer attractive valuations.
August 01, 2024 | 7:36 pm
News sentiment analysis
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NEGATIVE IMPACT
The Roundhill Magnificent Seven ETF, which tracks major tech stocks, declined by 1.9%, indicating a broader selloff in the tech sector.
The decline in MAGS reflects a broader selloff in major tech stocks, suggesting short-term negative sentiment in the sector.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 70
NEGATIVE IMPACT
The Invesco QQQ Trust, which tracks the Nasdaq 100, fell 2.7% after a 3% rally, reflecting investor uncertainty following disappointing economic data and earnings reports.
The QQQ's decline indicates a significant shift in investor sentiment following disappointing economic data and earnings reports, suggesting short-term downward pressure.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
The iShares Semiconductor ETF plummeted over 7%, erasing gains from the previous day, highlighting significant volatility in the semiconductor sector.
The sharp decline in SOXX indicates heightened volatility and investor concerns in the semiconductor sector, likely leading to short-term downward pressure.
CONFIDENCE 90
IMPORTANCE 65
RELEVANCE 75
NEGATIVE IMPACT
Tesla's high forward P/E ratio of nearly 80, with forward earnings growth of less than 6%, suggests that its current valuation may be difficult to justify.
Tesla's high forward P/E ratio relative to its low forward earnings growth suggests that its current valuation may be difficult to justify, indicating potential for short-term downward pressure.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 70
NEUTRAL IMPACT
Alphabet's earnings disappointed investors, but its strong capital spending plans for AI infrastructure suggest long-term growth potential.
Despite disappointing earnings, Alphabet's commitment to AI infrastructure spending suggests potential for long-term growth, balancing short-term negative sentiment.
CONFIDENCE 80
IMPORTANCE 50
RELEVANCE 60
NEUTRAL IMPACT
Microsoft's earnings fell short of expectations, but its significant investment in AI infrastructure indicates a focus on future growth.
Microsoft's disappointing earnings are offset by its substantial investment in AI infrastructure, suggesting a balanced outlook with potential for future growth.
CONFIDENCE 80
IMPORTANCE 50
RELEVANCE 60
POSITIVE IMPACT
Meta's strong earnings growth is not fully recognized, making it an attractive investment despite the recent tech selloff.
Meta's strong earnings growth, which is not fully recognized by the market, suggests potential for short-term upward movement despite the broader tech selloff.
CONFIDENCE 80
IMPORTANCE 55
RELEVANCE 65
POSITIVE IMPACT
Netflix's strong earnings growth almost matches its forward P/E ratio, indicating it is undervalued and has potential for upward movement.
Netflix's strong earnings growth relative to its forward P/E ratio suggests it is undervalued, indicating potential for short-term upward movement.
CONFIDENCE 80
IMPORTANCE 55
RELEVANCE 65
POSITIVE IMPACT
Nvidia's forward P/E ratio of 32.1 is considered low relative to its expected forward earnings growth of 60.9%, indicating attractive valuation.
Nvidia's attractive valuation, with a low forward P/E ratio relative to its high expected earnings growth, suggests potential for short-term upward movement.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 70