Wedbush says the recent sell-off in tech stocks is a buying opportunity, as earnings could drive shares higher 15

• Wedbush says the recent sell-off in tech stocks is a new buying opportunity for investors.

• Tech stock earnings are expected to be strong this quarter as the artificial intelligence boom continues.

• Strong Earnings Season Could Finally Drive Tech Stocks Higher 15%, Wedbush Forecasts

Wedbush sees tech stocks as a strong buy after last week's decline, as a solid corporate earnings season could spark another double-digit rally in the sector before the end of the year.

Tech stocks sold off along with Big Pan last week as the Nasdaq Resonance Composite Index slipped 0.6% as traders were treated to a fiery Consumer Price Index report that lowered expectations for a Fed rate cut. According to the CME FedWatch tool, higher-than-expected inflation over the past three months caused investors to lower their odds of a June rate cut to 18%.

But Wedbush said the earnings environment for tech companies still looks strong, especially considering the artificial intelligence frenzy that has sent tech stocks soaring over the past year. Strategists added that a strong earnings season could be a major positive catalyst for tech stocks, which are expected to soar another 15% by the end of 2024.

"We see the recent risk-off environment and tech sell-off as a clear buying opportunity for the upcoming tech earnings season," strategists said in a report Sunday." While a hot CPI, weak bank earnings and geopolitical concerns have put pressure on stocks, the stage and bright lights of Broadway are now focused on the upcoming critical tech earnings season, which we believe will be stronger across the board."

Consumer spending trends for internet companies were "strong" in the first quarter, according to a consumer survey conducted by Wedbush. They added that growth in digital advertising is also expected to be strong, which will be a boon for companies like Alphabet, Amazon and Meta.

Meanwhile, AI spending is expected to account for 10% of a company's IT budget this year, which will be a boon for companies like Microsoft and Palantir. strategists at Wedbush predict that spending on AI will reach $1 trillion over the next decade, with a second, third, and fourth wave of spending coming in the next few years.

We've been doing a lot of fieldwork around the world over the past month, which gives us confidence that the monetization of the AI revolution has now begun to enter the next stage of growth, as the baton has been passed from the semi-finished product to the software segment, and the use cases are bursting at the seams," the report added, "We've been doing a lot of fieldwork around the world, which gives us confidence that the monetization of the AI revolution has now begun to enter the next stage of growth, as the baton has been passed from the semi-finished product to the software segment, and the use cases are bursting at the seams," the report added. The report adds, "Our extensive fieldwork around the world gives us confidence that the monetization of the AI revolution has now begun to enter its next growth phase, as the baton has been passed from the semi-finished product to the software, and the use cases are bursting at the seams.

Investor sentiment on Wall Street was subdued last week as traders considered the possibility that interest rates could stay higher for a longer period of time. According to AAII's latest Investor Sentiment Survey, only 43% of investors were bullish on the stock market over the next six months.

Fears of a recession are also on the rise, as high interest rates threaten to tighten the economy too much and send it into recession. According to the New York Fed's latest estimate, by March 2025, the U.S. economy has a 58% chance of falling into a recession.

Stocks rebounded Monday as investors shrugged off geopolitical turmoil in the Middle East and turned their attention to corporate earnings and new macroeconomic data.

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