Singapore markets closed
  • Straits Times Index

    3,269.27
    -32.69 (-0.99%)
     
  • Nikkei

    28,546.98
    +727.65 (+2.62%)
     
  • Hang Seng

    20,175.62
    +93.19 (+0.46%)
     
  • FTSE 100

    7,500.89
    +34.98 (+0.47%)
     
  • BTC-USD

    24,523.73
    +101.29 (+0.41%)
     
  • CMC Crypto 200

    574.64
    +3.36 (+0.59%)
     
  • S&P 500

    4,280.15
    +72.88 (+1.73%)
     
  • Dow

    33,761.05
    +424.38 (+1.27%)
     
  • Nasdaq

    13,047.19
    +267.27 (+2.09%)
     
  • Gold

    1,818.90
    +11.70 (+0.65%)
     
  • Crude Oil

    91.88
    -2.46 (-2.61%)
     
  • 10-Yr Bond

    2.8490
    -0.0390 (-1.35%)
     
  • FTSE Bursa Malaysia

    1,506.19
    +0.63 (+0.04%)
     
  • Jakarta Composite Index

    7,129.28
    -31.11 (-0.43%)
     
  • PSE Index

    6,699.66
    +18.98 (+0.28%)
     
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Tech sentiment 'feels pretty awful, which is a great sign': Analyst

·Reporter
·2-min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

The brutal 2022 for stocks amid rising interest rates and soaring inflation has been particularly rough for technology-based growth stocks, and that could be an opportunity for longer term investors.

"Every rally we've seen in tech has been met with harder selling in a lower low," Jefferies Equity Research Analyst Brent Thill told Yahoo Finance (video above). "Right now, it feels pretty, pretty awful, which is a great sign."

For investors with a three- to five-year window, he added, now is a "pretty good opportunity" to dive into the tech space.

"If you think about [it]," Thill explained, "typically you want to buy when sentiment's terrible and sell when things are great. We're at one of those moments where everyone's saying how evil tech is and how bad it is, and everyone's running away from it."

Microsoft CEO Satya Nadella speaks during a Reuters Newsmaker event in Manhattan, New York, U.S., September 27, 2017. REUTERS/Shannon Stapleton
Microsoft CEO Satya Nadella speaks during a Reuters Newsmaker event in Manhattan, New York, U.S., September 27, 2017. REUTERS/Shannon Stapleton

Many investors have flocked to the energy sector. And if and when that trade starts to falter, Thill added, it's "another key" for money to come back to tech.

"Every one of our clients went to a recession portfolio — owning energy, owning dollar store, owning Coke, Pepsi, McDonald's — and at some point, that trade reverses," he said.

Thill also stressed that the high costs in gas and food are leading to "massive consumer weakness," meaning that big box retailers Walmart (WMT) and Target (TGT) are feeling the pinch shoppers shift preferences for discretionary spending.

The question, according to Thill: Will that weakness spread to enterprise companies?

Microsoft recent cut its guidance for fourth-quarter profit and revenue, suggesting to Thill that may be the case in the near term.

"[Microsoft] didn't say that the underlying fundamentals were terrible, but we worry about that potential that is a warm-up act for them to say '[Foreign exchange] has gotten more difficult, so is the fundamental business,'" Thill said. "So everyone's worried, and that's going to create a lot of worry going into the July quarter prints [and] for the June quarter end."

Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance

Download the Yahoo Finance app for Apple or Android

Follow Yahoo Finance on Twitter, Facebook, Instagram, FlipBoard, LinkedIn, and YouTube

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting