Tech stocks have been hit hard in the market sell-off. Longtime tech bull Dan Ives, global head of technology research at Wedbush Securities, shares how he is viewing the sector right now.
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So as an investor right now, when you're looking at all of these large cap tech stocks that are falling, what are you telling people to do? Just do nothing? Sit on your If you have them, just hold on to them and wait.
What we're doing is we're basically going through worst case scenarios. Where can any earnings be worst case? What is Apple? Microsoft. So you have to do scenario analysis and then basically going to say, okay, based on this is a base case, best case, worst case, do scenarios. And look, that's we're taking out the COVID 2020 playbook. The difference, so you're basically looking through like forget 2Q, probably forget 3Q. What do normalized earnings look like when you go out to 26? Assuming that this normalizes, but then the problem is that you can't put the genie back in the bottle. Does it create something that's much more sinister in terms of a black swan? I think that's the worry. And then also it just comes down to like the confidence in the beltway. It's it's been look, it's something that unlike anything I've seen, I've navigated everything from.com bubble to today. So it's uh so that look, that's why I don't just sit here. So many of those other moments were times to just you buy them, you don't worry. This is once you cannot say that given you don't know the rules of the game.
So how long really quickly here, how long for these stocks to recover? And how long until we start hearing about layoffs at these tech companies?
I think you don't have layoffs for another few months cuz no one wants until you have a good sense of what the actual policy is in negotiations. So I don't think any companies go down that route. But when it comes to like how low can they go, it comes down to like till you bake in a full on deep recession into these numbers, then the stocks could continue to fall.
One more question. Going back to the iPhone. If you're thinking you might want a new iPhone, but you've been going back and forth. You better go get it right now. I mean, are we going to see this sort of bump in Apple sales ahead of the tariff imposition?
No, but but but that bump is almost it's meaningless relative to the dark storm that's coming. And then it comes down to like the average car is going to go up five to $10,000. So when that the reality of that, UAW workers, they could be happy at that moment, but then all of a sudden when you have to lay off 15, 20%, your GM4, it's not such a happy day there. So I think that's the reality is that many are underestimating the unintended consequences of what's happening and in the worst policy mistake in the last 100 years.