Market volatility has become a common theme in recent months, with the CBOE Volatility Index hitting a high of 66 during the August 5 selloff. This spike was triggered by weaker-than-expected jobs data and concerns over an imminent recession due to the unwinding of the yen carry trade. As a result, the S & P 500 Information Technology index and the Invesco QQQ Trust, which tracks the Nasdaq-100 index, have both seen declines of over 4% in the past month.
The tech sector had a strong first half of the year, with information technology stocks gaining nearly 28% and CNBC’s Magnificent 7 index surging over 36%. However, recent market volatility has caused some tech stocks to pull back, presenting an opportunity for investors to consider new positions in key tech names.
According to Bernstein, investors should keep an eye on several key tech names that have the potential for significant upside. The firm highlighted a basket of its seven best technology, media, and telecommunications stock ideas, with a median upside of 26% to Bernstein’s price targets.
Top Stock Picks
One of the top picks recommended by Bernstein is Uber, which is seen as a dominant player in the rideshare and delivery space. The firm expects a substantial turning point in EBITDA, with a 40% compound annual growth rate from 2023 to 2026. Uber’s shares have already risen by 17% this year, and Bernstein remains bullish on the stock, giving it an outperform investment rating with a target price of $95.
Dell is another top tech pick by Bernstein, with the stock climbing over 45% in 2024. The firm’s price target of $155 implies a 39% upside from the current price. Bernstein is positive on Dell’s Infrastructure Solutions Group (ISG), expecting strong AI server orders and improving profitability in the coming year.
Investor Sentiment
Wall Street analysts are also bullish on Uber, with over 90% of analysts covering the stock rating it a buy. Similarly, Dell has received positive sentiment from analysts, with the majority giving it a buy rating. This positive sentiment from analysts reflects the potential upside for these tech stocks in the current market environment.
Given the recent market volatility and pullback in tech stocks, investors should consider adding key tech names to their portfolios. Companies like Uber and Dell, recommended by Bernstein, offer significant upside potential based on their strong fundamentals and growth prospects. With the tech sector poised for a rebound, now may be the right time for investors to put new money to work in these promising tech stocks.