During an interview with CNBC, Ives said that the markets are currently treating Microsoft, Oracle, and Meta as bear-market stocks.
- Ives said that investors in these tech companies are growing frustrated with the patience required to see results from their capital expenditures for the AI buildout.
- He added that these companies remain important for what he called the fourth industrial revolution.
- Ives also added that the equity markets are overreacting to the price increases that Apple announced last week.
Wedbush’s Global Head of Tech Research, Dan Ives, said Monday that the sell-off in Microsoft Corp. (MSFT) and Oracle Corp. (ORCL) is overdone.
During an interview with CNBC, Ives added that he sees a silver lining emerging for Big Tech companies over the next six to nine months, and that Microsoft and Oracle stocks are “way oversold.”
“I think in July, when we see earnings in terms of Q2, that’s actually when we'll see a pretty big catalyst for big tech,” he added.
Microsoft shares were up nearly 2% in Monday’s pre-market trade, while Oracle shares were up about 4%.
Markets Treating MSFT, ORCL, META As Bear Market Stocks, Says Ives
Ives added that the markets are currently treating Microsoft, Oracle, and Meta as bear-market stocks, highlighting the divergence between these tech stocks and those of memory-space companies.
“I think it’s a bifurcated market. Ultimately, it’s those that are spending the capex… the Microsofts, the Metas; we’ve seen this with Alphabet as well. Those are essentially in the penalty box right now,” he added.
Ives added that investors in these tech companies are growing frustrated with the patience required to see results from their capital expenditures on AI infrastructure, despite these companies being important to what he called the fourth industrial revolution.
Markets Overreacting To AAPL’s Price Increases, Says Ives
Ives also added that equity markets are overreacting to the price increases announced by Apple Inc. (AAPL) last week, as it seeks to offset higher memory and storage costs.
“They’re big price increases, but I think when you look at the iPhone, you have probably a $150-$200 price increase, depending on the different tiers,” he said, while adding that Apple is not going to stomach the increase in memory and storage costs.
Ives added that Apple ultimately needs to ensure its margins hold up, while noting that he thinks the demand destruction resulting from these price increases will be minimal.
MSFT stock is down 23% year-to-date, while ORCL stock is down 24%. The S&P 500 ETF (SPY) is up 19% over the past 12 months, while the Invesco QQQ Trust (QQQ) is up 29%.
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