Goldman Sachs Makes a Big Call on Tech Stocks

September 29, 2021 –

There are mixed signals as to how to currently position oneself in the market as news reports are calling many things a good buy, from doubling down on momentum names all the way to buying cyclical value stocks, but Goldman Sachs is bullish on lots of large-cap internet stocks. A number of companies, including Amazon, Facebook, Snap, Uber, Lyft, and Expedia all received buy ratings from Goldman’s investment team. They see secular trends in revenue growth and operating efficiencies scaling these companies even larger over the next couple of years. While they don’t consider themselves overly bullish, they see digital advertising being a key growth area for these companies to have their full upside priced correctly by the wider market. Subscriptions, the creator economy, cloud computing, and augmented reality are all reasons to be fans of large-cap growth, but they are staying away from certain names, such as Airbnb and Twitter.

Magnifi takeaway: The Fed keeping rates low is very promising for growth companies that are reliant on the credit-frothy economy. However, unpredictable rate moves by the Fed are also the key risk. Live by the sword, die by the sword.

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