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It has been a brutal year for most tech companies.
Apple Inc (NASDAQ:AAPL) stock is down nearly 29% in 2022 — and that made it the top performer of the FAANG-gang in big tech.
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Facebook owner Meta Platforms Inc (NASDAQ:META), Amazon.com, Inc. (NASDAQ:AMZN), Netflix Inc (NASDAQ:NFLX) and Google parent Alphabet Inc (NASDAQ:GOOGL) have all done far worse, with Meta plunging 65% this year.
Not to mention the much-loved Tesla Inc (NASDAQ:TSLA) stock, which was down 71% this year, with nearly 38% of those losses coming in just the last month.
So, what's the realistic view for the market as it pertained to tech going into 2023?
Loup Funds Managing Partner Gene Munster offered his opinion Tuesday on Benzinga’s extended PreMarket Prep broadcast which included market pundits such as New Age Wealth Advisors founder Todd Gordon, Wedbush Securities Equity Analyst Michael Pachter and Piper Sandler Managing Director and Chief Market Technician Craig Johnson.
“I think the reality is, is that this has been such a tough year for tech that there is this hidden optimism [among investors] — that tech is just going to rip back. As long as that is out there, that optimism, I don’t think the markets have bottomed,” Munster said.
Munster noted the optimism surrounding tech stocks was based on strong corporate fundamentals, yet shares of those companies, such as Meta, were down about 65%. Nevertheless, these types of companies could continue to exist for a long time, aiding in that optimism.
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On Tesla, Munster said current CEO Elon Musk was doing the “right thing,” and will likely step down within the next three years, but would comfort investors by staying involved with its products.
“I think the fundamentals around Tesla are generally positive,” Munster said, having noted the stock’s performance over the last quarter.
Munster said he cannot accurately forecast how the company would perform over the coming months but pointed out Tesla had a number of advantages over conventional auto companies.
Munster advised investors that if they had a time horizon of more than a year, they may consider purchasing shares of Tesla at the current discount since the business could still gain market share.
With regard to Apple, Munster stated that while a share buyback would assist with between 5% and 10% earnings growth, Apple must step up growth once again in order to obtain further multiple expansion.
If it completed the still-rumored Apple Car and capture 5% of the auto market, Munster said, it could solve its growth issue.
While Munster admitted he couldn't state with certainty the tech giant was building a car, he noted it "would double [Apple's] revenue."
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Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.