The firm added Microsoft to the top of its list, noting that it's one of the stocks most exposed to "still resilient IT budgets" and has "defensive hybrid apps/infra characteristics." Analyst Tyler Radke also said the firm has high conviction in Microsoft's "sustained double digit growth," led by momentum in its commercial cloud business, and long-term pricing power.
"With valuation multiples near multi-year lows, we believe the sector de-rating is mostly done, especially with Citi's 10-year interest rate Dec-31 forecast for 2.75% ." He also said valuations are back to multiyear lows, which could lead to estimate cuts in the second half of the year. "Software valuation multiples relative to the S & P 500 and in hypergrowth have fallen to multi-year lows and have come as 10-year interest rates have risen dramatically.
Every single time an article like this shows up , we take a leg lower on the market
software selloff is just getting started, and microsoft top pick is a bad idea
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