Macro Research Not time yet – maintain 2.5 Stars “ | FSMOne SG - Research Highlights

Macro Research


Not time yet – maintain 2.5 Stars “Neutral” rating for the Digital Economy


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• Tech stocks have plummeted by as much as 50%, over the year as inflation, rate hikes, the Russia-Ukraine war, and China lockdowns weighed on the sector.

• In the near-term, we see near-term downside risks which include a recession, and high inflation. The digital economy looks challenged and earnings growth is likely to be subdued in the next 6-12 months.

• Overall, we recommend investors wait out the near-term volatility and for downside risks to be priced in, before going back into Tech stocks.

• Nevertheless, not all is doom and gloom, as Big Tech having a strong business model could prove more resilient in weathering the storm, and among the segments, the cloud business stands out.

• We maintain a 2.5 Stars “Neutral” rating, given the near-term downside risks and lack of positive catalysts. Our target price is USD 157 for the Invesco NASDAQ Internet ETF (NASDAQ: PNQI), which gives investors an upside potential of 18.6% as of 23 August 2022.


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: Invesco NASDAQ Internet ETF (NASDAQ: PNQI), ALPS O'Shares Global Internet Giants ETF (BATS: OGIG)