Morgan Stanley’s view on technology stocks
The firm’s equity analyst, Keith Weiss, wrote in a research note, “Our survey work suggests the strong demand environment is set to sustain into the back half of 2016 and even with the strong rebound, software valuations remain reasonable versus historical levels.” The analyst also believes that the outlook for the software industry will remain attractive. The continued demand for software and the merger and acquisition activity is supporting the software industry.
Performance of various indexes
The Technology Select Sector SPDR ETF (XLK), which tracks the performance of the technology sector, gained 15% on a YTD (year-to-date) basis, while the broad market S&P 500 Index (SPY) (QQQ) returned 8% during the same time period as of September 28, 2016.
Morgan Stanley (MS) focuses on three strategies in regards to its stock picks:
- midmarket growth darlings
- fallen angels
- overlooked value
The firm’s stock picks include stocks like GoDaddy (GDDY), HubSpot (HUBS), New Relic (NEWR), Palo Alto Networks (PANW), Splunk (SPLK), VMware (VMW), and SS&C Technologies (SSNC). Going forward in this series, we’ll discuss Morgan Stanley’s strategies and its top picks.