In today’s top stories, tech stocks issue weak earnings guidance, with Apple planning to keep iPhone production flat. Meanwhile, Nokia forms a 5G partnership with Taiwan Mobile, BofA names its top five stock picks and insider data indicates that a short-term recovery rally could be on the cards.
Tech firms lower forecasts.
Nvidia [NVDA], Nutanix [NTNX] and Snowflake [SNOW] were the latest companies to give lower-than-expected earnings forecasts amid increasingly challenging conditions for tech firms. The three stocks plunged 7%, 34% and 12% in after-hours trading, respectively, after issuing weaker guidance. However, as MarketWatch pointed out, some analysts believe tech stocks have overcorrected and are undervalued at the moment, especially in the cyber and cloud computing space.
After a slump in equity fund inflows last month, there are signs that this trend could be about to reverse. Despite the tech rout, Cathie Wood’s ARK Invest has continued to see inflows so far in 2022. BlackRock is also going against the market rotation from growth to value, with the launch of two ETFs tracking megatrends such as agriculture technology and blockchain
BofA’s top five picks.
In a recent note, Bank of America analysts identified five buy-rated stocks with “killer” statistics. All five were in the metals and mining industry and are well positioned to take advantage of strong demand. The line-up comprised UK-Australian mining company Rio Tinto [RIO.L], Chilean conglomerate Antofagasta [ANTO.L], aluminium and renewables firm Norsk Hydro [NHYDY], US gold miner Newmont [NEM] and Canadian gold company Agnico Eagle [AEM].
In this week’s Opto Sessions, founder and chief investment officer of HonTe Investments Alex Gurevich explains what he has learned from trading through economic and political crises. The tumbling of markets following the Russia-Ukraine conflict marks the macro investor’s third economic crisis that he’s traded through. “We’re experiencing a protracted bear market,” he says.
Hedge funds have been backing out of their bets on big tech. The bruising selloff that has seen the S&P 500 slide for the seventh consecutive week has led to tech-heavy hedge funds nursing some major losses. However, some funds, like Ray Dalio’s Bridgewater Associates and Warren Buffett’s Berkshire Hathaway, have been going against the grain and pouring money into big tech holdings.
Apple keeps iPhone production targets flat.
The tech giant is planning to keep its iPhone production numbers fairly flat this year, with around 220 million phones expected to be made in 2022, around the same as last year. While market forecasts expected 240 million, the tech industry as a whole has suffered due to supply chain issues and rising inflation, which is likely to impact sales across the smartphone market
Nokia and Taiwan Mobile partner on 5G.
Taiwan Mobile [TWM] has chosen Nokia [NOK] to form a partnership to improve the country’s 5G network coverage. The deal will include 4G and 5G dynamic spectrum sharing to improve Taiwan Mobile’s spectrum assets, as well as the use of Nokia’s energy efficient AirScale portfolio to enhance sustainability.
Disclaimer Past performance is not a reliable indicator of future results.
CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.
CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.
*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.