The economic downturn is a good time for the next batch of great companies to rise.
Tech investors have been caught in a whirlpool of slump this year. Since the end of last year, the Nasdaq composite index has fallen about 25%. Many technology stocks have fallen by more than 50%, and few stocks have survived the sell-off. In the face of soaring interest rates and fuel prices and fears of recession, investors first sold the winners during the epidemic, and then other types of technology stocks were also sold off.
On Tuesday, June 28, the Nasdaq closed down 3.1% as technology stocks led the u. S.stock market lower again as investors continued to worry about high inflation and the risk of recession.
Analysts believe that the bottom of technology stocks has not yet been identified and will continue to be under pressure from risks such as macro headwinds and supply chain shortages in the coming quarters. Analysts also pointed out that the pullback in technology stocks will help restore the health of fundamentals and eliminate some noise in the market to some extent, and they are still optimistic about long-term opportunities.
Earnings expectations do not yet reflect the risk of recession
At the recent online technology investment summit held by Barron Weekly, more than a dozen technology industry leaders, analysts and investors shared their views on the technology industry and the economic situation as technology stocks entered the "cold winter". They think,The growing likelihood of a recession will damage the fundamentals of the technology industry.
参加此次峰会的摩根士丹利(Morgan Stanley)美洲股票研究主管凯蒂·休伯蒂(Katy Huberty)指出，经济衰退导致许多公司利润缩水的可能性越来越大，但目前华尔街对大多数科技公司的盈利预期几乎还没有变化。
Katy Huberty, head of equity research for the Americas at Morgan Stanley, who attended the summit, pointed out that the recession is increasingly likely to shrink the profits of many companies, but Wall Street's earnings expectations for most technology companies have barely changed.
Huberty believes that there will be a round of adjustment in technology companies' earnings expectations from the start of the second-quarter earnings season to the rest of the year. She points out that the recessions of 2001 and 2008 both led to a drop of more than 50 per cent in technology companies' revenues.
长期投资成长股的Durable Capital Partners合伙人兼首席投资官亨利·埃伦伯根(Henry Ellenbogen)在和科技公司高管沟通后认为，经济可能会陷入衰退。埃伦伯根说：「在进入2022年时，CEO们基本上都制定了增长计划，但现在这些计划因为经济疲软已经变得更加保守，就连那些认为经济还会继续增长的公司也对增加投资感到担心。」
Henry Ellenbogen, partner and chief investment officer of Durable Capital Partners, a long-time investor in growth stocks, spoke with technology executives that the economy could fall into recession. "when we entered 2022, CEO basically had growth plans, but now these plans have become more conservative because of the weak economy, and even companies that think the economy will continue to grow are worried about increasing investment," Ellenbergen said. "
Ellen Bergen believes that this phenomenon, coupled with a decline in consumer spending, means that the US economy may have fallen into recession or will fall into recession in the second half of the year.
Bindiya Vakil, chief executive of Resilinc, a company that monitors the supply chain through AI, believes that supply chain disruptions will last for another 12 months, maybe even 18 months, as to the supply chain disruptions that plague head companies such as Apple Inc.
"this problem was initially caused by the epidemic, and then the conflict between Russia and Ukraine and the recurrence of the epidemic in some countries aggravated the supply shortage and caused more widespread damage," Wakir said. Although the problem has eased recently, it will take some time for the supply chain to really stabilize. "
No one can survive the recession, which kind of technology stocks are the riskiest?
One of the biggest concerns for technology investors is the extent to which corporate-targeted hardware and software companies will be adversely affected if the economy falls into recession. According to Barron Weekly, the question is not whether these companies can be immune from the recession (because no one is immune from the recession), but how much risk their business and share prices still face.
Early signs of economic weakness have been reflected in consumer-oriented companies such as retailers, as well as those that rely partly on advertising revenue. While some corporate-targeted technology companies have been largely unaffected by the slowdown in corporate IT spending in the most recent quarter, they are less likely to survive the recession.
Evercore ISI分析师阿米特·达里亚纳尼(Amit Daryanani)对经济衰退会给以企业为服务对象的科技公司带来什么样的影响进行了深入广泛的研究，他在周二（6月28日）发布的研报中警告称，从2008年至2009年金融危机期间股票的表现来看，这类科技公司的股票接下来可能还面临30%到40%的平均跌幅。
Evercore ISI analyst Amit Darianani (Amit Daryanani), who has conducted in-depth and extensive research on the impact of the recession on technology companies serving companies, warned in a research report released on Tuesday.Judging from the performance of stocks during the financial crisis of 2008-09, shares of such technology companies are likely to face an average decline of 30% to 40%.
Darianani divides the type of technology stocks he tracks into three categories: "low-risk" stocks that are expected to perform better than the average of their peers; "medium-risk" stocks; "high-risk" stocks fall higher than the average of similar stocks due to high leverage, low income visibility or cyclical above-average.
达里亚纳尼认为，在经济低迷时期，一小部分「低风险」科技股的跌幅会比同类股票小一些，下跌空间不到20%。他在研报中写道：「我们认为，这部分科技股的收入可见性较高、客户/终端市场更加多样化、资产负债表强劲、周期性风险较小和/或拥有长期增长驱动因素，有望免受宏观不利因素的影响。」达里亚纳尼指出，$Check Point软件(CHKP.US)$ 、$戴尔科技(DELL.US)$、$F5 Inc(FFIV.US)$、$IBM Corp(IBM.US)$和$Palo Alto Networks(PANW.US)$就属于这类科技股。
Darianani believes that in an economic downturn, a small number of "low-risk" technology stocks will fall less than their peers, with less than 20% of the room for decline. "We believe that these technology stocks have higher revenue visibility, more diversified customer / end markets, strong balance sheets, less cyclical risks and / or long-term growth drivers," he wrote in the research paper. It is expected to be immune from macro headwinds. "Darianani pointed out$Check Point Software (CHKP.US) $ 、$Dell Technology (DELL.US) $、$F5 Inc (FFIV.US) $、$International Business Machines Corp (IBM.US) $和$Palo Alto Networks (PANW.US) $It belongs to this kind of technology stock.
达里亚纳尼认为「中风险」科技股可能面临20%到40%的跌幅，其中包括$阿克迈(AKAM.US)$、$安诺电子(APH.US)$、$苹果(AAPL.US)$、$Arista Networks(ANET.US)$ 、$CDW Corp(CDW.US)$ 、 $Ciena(CIEN.US)$ 、$思科(CSCO.US)$、$Cloudflare(NET.US)$、$Fortive(FTV.US)$、$飞塔信息(FTNT.US)$、$慧与科技(HPE.US)$、$惠普(HPQ.US)$、$瞻博网络(JNPR.US)$、$美国网存(NTAP.US)$ 、$Resideo Technologies(REZI.US)$、$Vertiv(VRT.US)$和$Vivint Smart Home(VVNT.US)$ 。
Darianani believes that "medium risk" technology stocks could face a decline of 20% to 40%, including$Akmai (AKAM.US) $、$Arnold Electronics (APH.US) $、$Apple Inc (AAPL.US) $、$Arista Networks (ANET.US) $ 、$CDW Corp (CDW.US) $ 、 $Ciena (CIEN.US) $ 、$Cisco Systems (CSCO.US) $、$Cloudflare (NET.US) $、$Fortive (FTV.US) $、$Flying Tower Information (FTNT.US) $、$Huihe Technology (HPE.US) $、$HP (HPQ.US) $、$Juniper Network (JNPR.US) $、$American Network Storage (NTAP.US) $ 、$Resideo Technologies (REZI.US) $、$Vertiv (VRT.US) $和$Vivint Smart Home (VVNT.US) $ 。
While technology stocks will remain under pressure in the coming quarters, analysts remain bullish on long-term investment opportunities.
Durable Capital Partners的埃伦伯根认为，在估值和盈利预期重置之际，关注基本面的投资者将拥有优势。他说：「下一个周期的赢家是那些在经济低迷时期实际上表现良好、显示出有能力推动业务发展、同时又能投资于未来的公司。在经济低迷时期学到了什么常常是造就下一批伟大公司的基础。」
Ellen Bergen of Durable Capital Partners believes that investors who focus on fundamentals will have an advantage as valuations and earnings expectations reset. "the winners in the next cycle are companies that actually perform well during an economic downturn and show the ability to drive their business while investing in the future," he said. What you learn during an economic downturn is often the basis for the next batch of great companies. "
Edit / lydia