We are now on the cusp of earnings season with hundreds of companies set to release their financial results in the coming days. In general, sentiment is cautious- Wall Street expects the S&P 500's earnings to fall by 2% compared to the same quarter last year. This would represent the first such decline since 2016.
However, Barclays has some good news for investors- and for tech investors in particular. The firm has just released a report revealing a bullish 2Q outlook for large cap tech stocks compared to previous prints. That’s thanks to a slew of factors.
Namely: 1) sentiment is mixed following multiple quarters of decelerating growth, downward estimate revisions, and increased regulatory scrutiny; 2) valuations remain well off the previous peak; and 3) acceleration from a couple of key companies (see below) should drive sentiment higher.
“In contrast to the pattern over the past 5+ years, the S&P is currently achieving new all-time highs without the leadership of large cap internet, and contrarians like us would view this as favorable for the current setup” writes top-rated Barclays analyst Ross Sandler.
With this in mind, the analyst sets out his five favorite Internet stocks for this earnings season. According to TipRanks, he is ranked #370 out of over 5,200 tracked analysts for his strong stock picking skills. Here are his five favorite stock picks now:
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