Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (59354)

5/24/2024 4:32:27 PM

From: Johnny Canuck

Read Replies (1) | Respond to of 69835

archive.today
webpage capture

Saved from

no other snapshots from this url

24 May 2024 20:10:02 UTC

All snapshots

from host www.cnbc.com

Webpage Screenshot

share download .zip report bug or abuse Buy me a coffee

SKIP NAVIGATION

BREAKING
Nasdaq closes Friday at record high as Nvidia and the AI trade rallies on
?

MARKETS
BUSINESS
INVESTING
TECH
POLITICS
CNBC TV
INVESTING CLUB

PRO

MAKE IT?
SELECT?

USA
• INTL

WATCHLIVE

Search quotes, news & videos?
WATCHLIST

|

SIGN IN

CREATE FREE ACCOUNT

Buy quality tech stocks that are immune to high inflation and rates, Trivariate Research says
PUBLISHED FRI, MAY 24 2024•3:01 PM EDT|UPDATED 8 MIN AGO

Lisa Kailai Han @LISAKAILAIHAN

SHARE?Share Article via Facebook?Share Article via Twitter?Share Article via LinkedIn?Share Article via Email

As inflation lingers at a generational high, some stocks stand out for their ability to help investors hedge against the effect of high interest rates better than others. That’s the message from Trivariate Research, which argues that with inflation staying stubbornly above the Federal Reserve’s 2% annual target, investors have become increasingly worried about the impediments companies face from higher borrowing costs and the need to keep raising prices. “Subsequent to the all-time low interest rate in the history of the United States, post-Covid, dynamics changed,” wrote Trivariate Research founder Adam Parker, former Morgan Stanley chief U.S. equity strategist, in a recent note. “What ensued was a massive negative correlation between the perception about interest rates and the valuation of growth companies from late in 2021.” But despite price increases running at elevated levels, interest rates and inflationary risks are affecting stocks less and less as time goes on. While a basket of high-quality growth stocks used to be negatively correlated to inflation, meaning their stock prices suffered as inflation turned higher, Trivariate says the relationship has since changed. “Today, the correlation of the high-quality growth basket to our inflation basket is zero,” the firm said. In the same report, Trivariate Research shared its basket of high-quality names in the technology sector with a near-zero correlation to its inflation basket. Here are a few of the stocks from the list: One company named was Keysight Technologies . Shares of the electronic equipment manufacturer have fallen almost 10% this year. Even so, Morgan Stanley — which is overweight on the stock — earlier this month named Keysight a “top pick.” “We believe estimates for FY24 have bottomed post ~12% earnings cut last quarter, with valuation (~20x FY25) reasonable against exposure,” Morgan Stanley analyst Meta Marshall wrote. “Stable orders plus view of recovery timeline could act as a catalyst.” Also included in Trivariate’s basket was Procore Technologies , which writes management software for the construction industry. The stock is relatively unchanged year to date. In April, JPMorgan named Procore one of its top picks, citing its position as the leading provider of construction-focused software as a service (SaaS), cloud-based platform. “Procore is exposed to a total of ~$11 trillion of annual worldwide construction volumes. Multiplying that figure by the share of spen[d] on IT solutions (1.7%) and then calculating the portion of IT budget directed at application software (7.3%) translates into ~$13 billion global” total addressable market, the bank wrote. Cloud-computing stock Nutanix has soared 52% this year, but Raymond James believes there’s further upside ahead. The firm recently upgraded Nutanix to an outperform rating from market perform. “We have gained a better appreciation for Nutanix’s opportunity to gain share from VMware following its acquisition by Broadcom,” analyst Simon Leopold wrote. “Broadcom’s efforts to improve growth and performance for VMware have led to bundling and higher than expected price hikes, which will lead some customers to seek alternatives in certain instances from Nutanix.” — CNBC’s Michael Bloom contributed to this report.

NEXT PRO TALK
5 Days Remaining
Wed, May 29 2024 - 11:00am
Add To Calendar

CNBC Pro Talks: Beyond Nvidia: Outperforming fund manager to reveal the top AI stocks to buy

MORE IN PRO