After experiencing a rough bear market in 2022, the tech sector rebounded strongly in 2023. The NASDAQ, which is heavily tech-focused, saw a 43% increase in returns, while niche-focused tech ETFs experienced even higher gains. Now, in 2024, the tech rally continues to show strength. Tech stocks are propelling market gains, and the theme of AI from last year is still attracting investors. The U.S. economy is solid, interest rates are expected to decrease, and AI adoption is still in its early stages, all contributing to reasons to believe that the tech rally is far from over.
Banking giants such as Morgan Stanley with analysts like Keith Weiss have been sorting out tech industry giants for potential investment options. Palantir, a big data company that saw a gain of 220% last year, and Salesforce, a cloud-based software-as-a-service company, are two industry leaders that have caught the attention of investors. However, according to Weiss, not all that glitters is gold. In his analysis, he favors Salesforce over Palantir, citing a more favorable valuation and AI opportunities. Palantir’s recent performance has been strong, but Weiss rates its stock as Underweight, forecasting a substantial 50% decrease from current levels. Most other analysts agree, with 4 others joining Weiss in the bearish camp and only 3 giving a Buy rating.
Despite not experiencing a huge increase in stock price last year like Palantir, Salesforce still delivered healthy returns of 70% and has been rated as Overweight by Weiss. He sees AI opportunities and a favorable valuation boosting the company’s growth prospects. Many other analysts also agree with his assessment, giving Salesforce a Moderate Buy consensus rating.
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