Tech’s had a brutal year. But four stocks have a bright future, investor says

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The technology sector took a bashing in 2022. The tech-heavy Nasdaq Composite tumbled more than 30% last year. That’s significantly worse than the S & P 500 or the Dow Jones Industrial Average , which lost about 20% and 9% of their market values last year. But investment pro Jason Ware remains bullish on the sector over the longer term. “If you look at the companies that make up the Nasdaq … let’s just look at the QQQ ETF, the largest companies on the Nasdaq, the mega large-cap tech giants, these businesses are still doing very well,” Ware, who is partner and chief investment officer at Albion Financial Group, told CNBC’s ” Street Signs Asia ” on Wednesday. Ware was referring to the Invesco QQQ Trust — an exchange-traded fund that tracks the Nasdaq 100 . The latter is an index that comprises 100 of the largest non-financial companies that trade on the Nasdaq. The Invesco QQQ Trust is often seen as a barometer of the tech sector’s performance, given its heavy tech weighting. While Ware acknowledged that valuations of these large-cap tech companies have gone off a cliff, he remains confident in their longer-term growth. “They are generating lots of cash. Most of them are growing within secular growth niches that aren’t necessarily tied to cyclical economics, but rather, are a part of changes in technology in the way that we consume and just all the things that really can lead to lasting structural growth,” he added. Stock picks The current sell-off thus presents a “great opportunity” for long-term investors to buy the dip, including in tech giants such as Apple and Alphabet , according to Ware. Those stocks weren’t spared in last year’s tech rout and have sold off significantly despite their strong underlying fundamentals. He continues to like Apple over a “multi-year time frame,” saying it’s a business with “a lot of optionality for growth.” “They have a ton of cash on the balance sheet, they generate over $100 billion in free cash flow per year. So, we think that Apple has a great story ahead of it both in services and other things like [augmented reality],” he said. Ware also likes Google parent Alphabet, calling it a “wonderful play” on digital advertising. He added that Google has “a number of levers” for growth over the next five years. He is also a fan of software giant Microsoft . He said the company is “still absolutely a secular growth story” with 10% to 15% earnings growth “as far as the eye can see.” Read more These low-volatility stocks beat the market last year — and analysts see further upside in 2023 Wall Street is bullish on this chip giant, with Morgan Stanley giving it 55% upside Buy these global clean energy stocks, UBS says, forecasting one to rise 50% Also making his list is Oracle , a relatively under-the-radar name that used to be one of the world’s largest software companies. “We like Oracle. It’s one that doesn’t get a lot of conversation because it’s seen as old tech, but they’re taking a fair amount of market share within the cloud space,” he said. “And the stock is trading at around 13 times earnings. So, this is a cheap tech company you can own that is under-owned by the Street and has a tailwind of accelerating revenue and profit growth because of their focus on the cloud. They’re doing a great job of bringing in new business there,” he added.