Beaten-Down Tech Stocks Finally Find a Bottom

Since January a technology stock index with a market capitalisation of at least $5 billion and a P/E ratio less than20x has fallen 22.5% - beating the broader Nasdaq-100.

   GERMANY - 2022/06/14: In this photo illustration Dell logo seen displayed on a tablet. (Photo ... [+] Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images) 
  SOPA Images/LightRocket via Getty Images
(Photo: SOPA Images/LightRocket via Getty Images) The Dell logo is seen on a tablet in the illustration.

What's the outlook for the theme? While near-term prospects remain uncertain, we still think that the theme is a good play on secular trends such as increasing digitization of the economy following Covid-19, and higher corporate IT spending. Moreover, many of the names in our theme are profitable, mature tech companies that are incumbents in their respective segments and this could provide some safety in today's market. Meta, which is owned by Facebook parent company TREFIS, is currently one of our most valuable stocks with a market cap of around $440 billion but it has fallen by about 53% since January 1st 2019 (as shown below).

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   DELL Return Compared With Trefis Multi-Strategy Portfolio