Wedbush Securities expects another robust year for tech stocks as growth prospects around cloud, cyber security, 5G, and the metaverse peak, heading into 2022.
The investment firm said Apple (AAPL) - Get Apple Inc. (AAPL) Report remains its favorite among FAANG stocks: Facebook, now called Meta Platforms (FB) - Get Facebook, Inc. Class A Report, Apple, Amazon (AMZN) - Get Amazon.com, Inc. Report, Netflix (NFLX) - Get Netflix, Inc. (NFLX) Report and Google (GOOGL) - Get Alphabet Inc. Class A Report.
The company made the ranking in a note written by analysts Dan Ives and John Katsingris.
Ives urged investors to recognize that, "pent-up demand story for Cupertino is still being underestimated ... with chip issues a transitory issue in our opinion."
Wedbush views supply-chain shortages as a catalyst to a multiyear "supercycle" for Apple's iPhone 12 and iPhone 13 in the years to come.
Ives added that the global chip shortage affecting everything from cars and laptops to phones and appliances is likely to "ease throughout" by the first half of 2022. That will further increase the overall "tech fundamental demand story into the Golden Age."
Webush has set an initial target of 19,000 points for the tech-heavy Nasdaq in 2022.
Ives and Katsigris listed Microsoft as their favorite name in cloud stocks.
"Azure's cloud momentum is still in its early days of playing out within the company’s massive installed base and the Office 365 transition is providing growth tailwinds into 2022," they wrote.
Wedbush said that remote work-related communication is expected to rise from to 55% from 43% by the end of 2022, and companies like Amazon , Google and IBM (IBM) - Get International Business Machines (IBM) Report will benefit from it.
Ives said cloud spending is expected to touch $1 trillion over the next decade.
Palo Alto Networks (PANW) - Get Palo Alto Networks, Inc. Report, CyberArk Software (CYBR) - Get CyberArk Software Ltd. Report, SailPoint Technologies (SAIL) - Get SailPoint Technologies Holdings, Inc. Report, Fortinet (FTNT) - Get Fortinet, Inc. (FTNT) Report and Tenable (TENB) - Get Tenable Holdings, Inc. Report among its top picks for next year.