Tech stocks have been among the worst performers in the current market downturn and investors are hoping that the new year will bring a reversal in sentiment. Against this backdrop, Wedbush analyst Daniel Ives outlined his Christmas wish list for the sector.

1. Abounding M&A News Flow: Ives said the tech sector is ripe for a massive consolidation phase, both on the enterprise and consumer side. A surge in M&A is likely, given depressed valuations for tech names and a strong appetite for strategic and financial buyers, he added.

A foretaste of what is to come on the front was seen when Coupa Software Inc. (NASDAQ:COUP) recently announced an $8 billion deal to be bought by tech-focused private-equity firm Thoma Bravo.

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2. Musk Handing Over Twitter Rein: With the kind of damage Elon Musk’s Twitter buy is inflicting on Tesla Inc. (NASDAQ:TSLA) stock, Ives called upon the billionaire to name a permanent CEO for the social media platform.

3. Microsoft Pocketing Activision: Microsoft Corp.’s (NASDAQ:MSF) proposed acquisition of Activision Blizzard Inc. (NASDAQ:ATVI) is facing opposition from the Federal Trade Commission. Ives wants the deal to go through, as he sees Activision becoming a key asset in Microsoft’s consumer gaming war chest. The fructification of the deal could be a precedence for larger deals in the big tech space, he added.

4. Conservative 2023 Guidance: Ives wishes tech executives to issue conservative guidance for 2023 when they report fourth-quarter results in January so that it would likely be viewed by the Street as achievable.

6. Reversal In Tech Stocks: Wedbush hopes for a 20% rally in the overall tech sector in 2023, with big tech, software and semiconductor stocks leading the charge.

8. Increased Activism: 2023 will bring more activism into the tech sector, with Salesforce.com Inc. (NYSE:CRM) likely a major target, Ives said.

9. Apple’s AR Glasses: Apple’s augmented reality glasses are also on Ives’s Christmas wish list for materializing in 2023.

10. More Flab Cuts: Ives calls for another 8-10% workforce reduction at big techs to manage the downturn forecast for 2023 and adjust to lower growth profiles.

Price Action: Technology Select Sector SPDR Fund (NYSE:XLK) ended Friday’s session down 1.32% at $127.48, according to Benzinga Pro data. The exchange-traded fund has shed about 26% year-to-date.

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