Following mixed results in the first quarter, Goldman Sachs identified four compelling tech buying opportunities. These stocks have solid topline growth, and they are more likely than others to survive the volatility in the market. Tech stocks are suffering a huge sell-off after years of beating returns. The sector has borne the brunt of a market rotation out of growth and into value names, as the likelihood of a steep rate hiking cycle — which makes growth stocks’ future earnings less attractive — hit home. The market’s nervousness was further increased by the string of disappointing first quarter earnings reports from Amazon, Google parent Alphabet, Netflix and Google parent Alphabet. These misses, along with concerns about future headwinds, have been compounded. The tech-heavy Nasdaq Composite notched its seventh straight week of declines last week— the longest losing streak for the index in 21 years. According to Goldman Sachs, there are still opportunities within the sector. Goldman Sachs analyst Eric Sheridan stated that the sector offers the best buying opportunity because these companies have a combination of strong topline growth and the ability to weather global economic downturns. 20. Read More Tech investor Jim Breyer claims he is adding Microsoft because of weakness. They are today’s cheapest stocks in tech following the steep drawdown. Stock picks Goldman identified as its top picks, which were large caps with weather-resistant potential. [the] volatile environment.” Amazon was selected by analysts as their “top choice for 2022”. They believe that Amazon will be exposed to many other growth trends such cloud computing, media consumption, and advertising. The bank says Amazon is still in demand, despite the fact that the vast majority of e-commerce has been experiencing weaker demand. The bank has a price target of $3,700 on the stock, which closed at $2,221.55 on May 26 — a potential upside of 66.6%. Goldman likes Uber, a ride-hailing company. Sheridan stated that while the shares haven’t seen a significant increase in value, Goldman still believes that the company can achieve more than 20% topline growth from local commerce and platform exposure. On the stock, Goldman has set a $55 price target. It closed on May 26 at $23, which represents a potential upside for 139%. Goldman included Meta, a parent of Facebook on his list. “We believe that the future landscape is much more favorable for margin stability and growth. [the second half of 2022] as management’s comments on the Q1 earnings call struck a positive tone on growth, investments & capital returns,” Sheridan said. Goldman’s Meta price target of $300 implies an upside potential of 57% to Meta’s May 26 closing price around $191. Alphabet rounds out Goldman’s top-ten list. Alphabet is the bank’s opinion of the digital advertising platform. It considers it a “strong performer” and thinks that the other units such as Google Cloud or “Other Bets”, could grow and sustain profit growth over the next few years. Goldman has set the price target at $3,000 for Alphabet stock. According to Goldman’s estimations, Alphabet shares closed around $2,155 May 26. This suggests that Alphabet could rise an additional 39.2%.
On Wednesday, May 19, 2010, a Goldman Sachs Group Inc. logo was displayed on the New York Stock Exchange floor in New York.
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Goldman SachsFollowing mixed results in the first quarter, the bank believes there are four compelling tech buying opportunities. According to the bank, these stocks are likely to be more resilient in today’s market volatility and offer strong topline growth.
