Big tech earnings took some of the froth out of the recent market rally. It’s also causing growth names to sell off. The selloff will likely take a few weeks to play out. That could give investors an opportunity to buy into the big-cap tech names before their next move higher.
With some companies still reporting, the real focus now should be on the big tech play with the best valuation and opportunities moving forward.
Currently, that leadership belongs to
Alphabet (GOOG). The parent company of Google is still in the early rollout of its AI technologies.
But with so much focus on the semiconductor side, Google is faring well, even if ad revenue for its search engine came in lighter than expected.
Google has still been a strong performer in the last year, with earnings up 50 percent.
Plus, with shares going for about 23 times forward earnings, it’s the cheapest of the big tech stocks dominating markets right now on a valuation basis.
Action to take: Investors should look at accumulating Google shares in the coming weeks, and buy up to $150. Google does not pay a dividend.
For traders, shares may decline a bit more in the coming days, but can likely start trending higher in the months ahead.
The April $155 calls, last going for about $2.50, could see high double-digit returns from a rebound in the coming weeks. Traders may want to scale in and add to the position on any further down days for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
