The supply shortages, macro headwinds, and resurgence of the coronavirus in China weighed on the shares of the big tech companies. Notably, shares of Apple, Amazon, and Alphabet are down about 27%, 38%, and 27%, respectively, on a year-to-date basis.
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While these large tech stocks have witnessed a pullback, rate hikes and fear of recession add uncertainty to their future trajectory. Amid the uncertainty, let’s look at what TipRanks’ proprietary tools and analysts’ recommendations reveal about the future of these big tech companies.
Apple (NASDAQ: AAPL)
Apple continues to benefit from the ongoing demand for its products. However, management warned that supply constraints and industry-wide silicon shortages could have a negative impact of $4 billion to $8 billion on its top line in Q3. Meanwhile, COVID-led challenges in China and adverse currency movement could remain a drag.
While Apple faces short-term headwinds, its stock has received 21 Buy and six Hold recommendations. Moreover, the average Apple price target of $186.33 indicates 43.4% upside potential over the next 12 months. New product launches and Apple’s faster M2 chip could support its growth.
Looking at hedge fund activity, Bridgewater Associates’ Ray Dalio, Caxton Associates’ Andrew Law, and Hirtle Callaghan & Co’s Ranji H. Nagaswami increased their holdings in AAPL stock in the last quarter. Apple stock also has positive indicators from TipRanks’ investors and bloggers. Overall, AAPL stock has an Outperform Smart Score of 9 out of 10.
Amazon (NASDAQ: AMZN)
The slowdown in e-commerce growth, inflationary cost pressure, and the weak near-term outlook are why Amazon stock is down. However, its solid competitive positioning in the cloud and e-commerce market keeps analysts bullish.
AMZN stock has received 36 Buy, one Hold, and one Sell recommendations for a Strong Buy consensus rating. Further, the average Amazon price target of $178.66 implies 72.4% upside potential.
TipRanks’ Hedge Fund Activity tool for AMZN shows that several hedge fund managers, including First Pacific Advisors’ Richard Atwood, have increased their holdings in AMZN stock. It’s worth noting that TipRanks’ investors are also optimistic about AMZN stock, and 8% of these investors have raised their holding in one month. All in all, AMZN stock has an Outperform Smart Score of 8 out of 10.
Alphabet (NASDAQ: GOOGL)
Macro challenges, adverse currency fluctuations, tough year-over-year comparisons, and pressure on YouTube’s ad growth took a toll on Alphabet stock. However, strength in cloud and network advertising augurs well for growth.
GOOGL stock sports a Strong Buy consensus rating on TipRanks, based on 30 unanimous buy recommendations. Moreover, the average Alphabet price target of $3,212.72 implies 51.6% upside potential.
Looking at hedge fund activity, Bridgewater Associates’ Ray Dalio, Chilton Investment Co’s Richard Chilton, and several other hedge fund managers have increased their holdings in GOOGL stock. Furthermore, GOOGL stock also has positive indicators from TipRanks’ investors and bloggers. GOOGL stock has an Outperform Smart Score of 9 out of 10.
Bottom Line
While these big tech companies face near-term headwinds, the positive indicators from analysts, hedge fund managers, financial bloggers, and TipRanks’ investors point to a healthy future ahead.
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