The market has recovered unevenly this year after the dismal performance of 2022. An analyst at Webusch commented on the development of the technology sector, which has led the current recovery.

New safe havens in the city: Tech stocks have become the ‘new security trade’ with big techs the key beneficiaries of this momentum, analyst Daniel Ive said in a note. The analyst gave a few reasons for the deduction, including:

• Combination of massive cash on hand and free cash flow potential
• Significant cost reductions underway led by Meta Platforms, Inc. META, microsoft corp MSFT, Amazon, Inc. AMZN, Alphabet, Inc. Google GOOD and other
• Conservative forecast issued during the December quarter earnings season
• Resilient technical fundamentals holding up despite the shaky macro
• Potential for a massive M&A wave in the technology sector, from both financial and strategic buyers

See also: The Best Tech Stocks to Buy Right Now

2 More Reasons to Buy Tech Stocks: Ives noted that large-cap technology and sub-sectors like cloud and cybersecurity are showing more resilient growth than expected. Despite budget constraints, companies have given the green light to projects and deployments, he said.

The analyst expects Microsoft, Amazon, and Google to deliver Q1 cloud results that will meet and likely exceed expectations.

The analyst also sees the prospect of the federal reserve remain restricted in implementing rate hikes for the remainder of the year. A pause or a rate cut by the end of the year is therefore likely banking crisis that played out in the last month, he added.

“With a 10-year title likely to have peaked, the green light for risk-on trading is underway and, in our view, just beginning with valuations that are still compelling for the struggling tech sector,” Ives said.

Preferred Tech Names: Wedbush repeated his Expectations for a 20% upside potential for technology stocks this year and said it expects first quarter results…