Tech Stocks’ Rout Is a ‘Golden Buying Opportunity’ for Investors, Analyst Says

• The recent selloff in tech stocks is a “golden buying opportunity,” according to Wedbush.

• The midweek rout in tech stocks was partly triggered by Trump’s hawkish comments on Taiwan.

• But the strong second-quarter results should spark a rebound in the tech sector, Ives said.

The fall in technology stocks represents a “golden buying opportunity” for investors, according to Wedbush analyst Dan Ives.

The recent selloff was partly triggered by former President Donald Trump’s hawkish comments about Taiwan and the possibility of new tariffs. a meeting with Times Of Update Businessweek.

“They took about 100 percent of our microchip business. I think Taiwan should pay us for defense. You know, we’re no different than an insurance company. Taiwan doesn’t give us anything. Taiwan is 9,500 miles away. It’s 68 miles from China,” Trump said.

“Taiwan took away our microchip business. How stupid are we? They took away all of our microchip business. They are immensely wealthy. And I don’t think we are any different than an insurance policy. Why? Why are we doing this?” Trump asked.

With polls and betting markets recently evolved in Trump’s favor As for the November election, investors took Trump’s comments seriously, with the Nasdaq 100 down more than 3% since the interview was published. Chip industry stalwarts also sold off their shares amid reports that President Joe Biden’s administration was preparing a new round of trade restrictions with China to limit its access to cutting-edge technology.

But Ives said Trump’s rhetoric may be more bark than bite, and the latest tech selloff ultimately represents a great buying opportunity for long-term investors.

“This is all just a high-stakes poker game for the Trump campaign and a warning shot at XI/Beijing,” Ives wrote. “We believe the ‘Trump trade’ does not ruin the AI ​​revolution thesis or the tech bull market and that, to some extent, it is simply a negotiation that will be a long and tedious process.”

Semiconductor production will not shift significantly to the United States in the near future: Taiwan produces about 92% of the world’s supply of advanced electronic chips.

And with the global economy dependent on silicon wafers that come from Taiwan, It is not in the US interest to disrupt this process by letting China take control of it.

Todd Jablonski of Principal Asset Management said the selloff in tech stocks was just a small blip in the grand scheme of things.

“A potential Trump administration does not disrupt the dynamics of big tech in the U.S. These types of market gyrations are common in the run-up to elections, and investors should be cautious when making decisions based on these fluctuations,” Jablonski said in a note Thursday.

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What matters most to tech stock prices over the long term is earnings, and that area remains a bright spot, Ives said.

“Our strategy remains to defend the thesis of the AI ​​revolution and to take advantage of massive sales like yesterday’s. We believe…