The stock markets entered the bear territory during the last couple of days. The major U.S. futures, the Dow Jones, the Nasdaq, and the S&P 500, plummeted down by more than 20% from their recent highs. Furthermore, the market endured massive sell-off during the last weeks due to the investors’ fears about the coronavirus pandemic.
Most of the investors prefer to hold on to cash instead of sinking their money in shares. Meanwhile, the stock markets’ volatility is increasing. Some experts think that panic sell-off created good opportunities. Several stocks are in the oversold territory presently. They are giving investors a chance to start building a long-term portfolio, which can bring hefty gains after the virus impact cools-off.
For example, there are few stocks in the technology sector with a solid balance sheet to endure any economic uncertainties. They have strong fundamentals and high growth potential.
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Why do the analysts recommend Tech Stocks amidst the coronavirus pandemic?
The U.S. tech sector has been more resilient so far compared with the other sectors. Energy Select Sector SPDR Fund fell by 53.2%. The Financial Select Sector SPDR Fund, and Industrial Select Sector SPDR Fund have also tumbled down by 26.5% and 26.2%, respectively. Meanwhile, the Technology Select Sector SPDR Fund declined only by 18.2% from its 52-week high.
According to experts, the massive long-term growth prospects of tech companies are the reason for the sector’s resiliency. Furthermore, the sector experiences continuous digital transformation, which only adds its attraction. And Rapid adoption of cloud computing has been a major growth driver, along with ongoing integration of AI and machine learning.
Blockchain, autonomous vehicles, IoT, AR/VR, and wearables also offer high growth opportunities. And experts are positive that the next-generation wireless revolution, also known as the accelerated deployment of 5G technology, will likely spur further growth.
However, that’s still not all. Tech companies are also cash-rich, which helps to remain afloat amidst the adverse business environment.
According to the latest quarterly results, Facebook, Amazon, Microsoft, Apple, and Alphabet’s Google have short-term investments and cumulative cash of more than $460 billion. That’s why the analysts think that such stocks would be the right choice now, that their prices are lowered.
