Tech stocks are only half-way through a longer-term re-rating process that will continue to spur a broader re-shaping of what constitutes fair valuations.
Speaking with TheStreet.com, Wedbush Securities Managing Director Dan Ives said fourth-quarter earnings from the likes of Facebook (FB) - Get Report, Apple (AAPL) - Get Report, Amazon.com (AMZN) - Get Report, Microsoft (MSFT) - Get Report and Google (GOOGL) - Get Report as well as Tesla (TSLA) - Get Report and other known tech and internet names will generally be strong.
At the same time, the ongoing transformation in how consumers use technology - from electric vehicles to cloud-based information storage to cybersecurity to face-to-face communications to 5G, still is a long-term trend that will continue long after the Covid-19 pandemic abates.
"It's going to be a jaw-dropping earnings season over the coming weeks, but I also think some of those transformational technology trends that I've seen over the past 20-plus years covering tech -- specifically in cloud, cybersecurity and e-commerce and what we'll start to see in 5G -- mean that tech stocks up 25%-plus from where we are today continues to be only half a re-rating in tech.
"I also think numbers could go significantly higher and I think this will be another seminal move forward for the tech stocks and the sector," Ives said, noting that investors should also be bracing for a flurry of upward guidance for 2021.