Technology wasn’t the best-performing sector in the S&P 500 last year, but the group turned in another impressive showing, and there’s no shortage of enthusiasm for tech stocks and the related exchange traded funds as 2022 unfolds.
One of the ideas to consider is the Goldman Sachs Innovate Equity ETF (GINN). The $486.66 million GINN isn’t a traditional tech ETF, but that’s all right. Actually, it’s better than “all right” because, arguably more so than competing strategies, GINN is heavily allocated to the corners of the tech sector that investors should be mulling over exposure to.
Acknowledging that tech multiples are high, Wedbush’s tech analysts Daniel Ives and John Katsingris highlight 11 tech stocks that could deliver the goods this year.
“We fully acknowledge that valuation sensitivity for high multiple tech stocks will be front and center in 2022 with the Fed tapering and set to raise rates throughout the year. This will clearly add to the volatility and some white knuckle days ahead,” say the analysts. However, they add that “the impending 4th Industrial Revolution will result in top-line growth prospects” that are significantly above Wall Street expectations in the year ahead.”
Not surprisingly, Apple (NASDAQ:AAPL) is among the tech stocks Wedbush likes for 2022. Apple, which briefly became the first company to hit a market value of $3 trillion on Monday, is GINN’s largest holding at weight of 2.5%. Microsoft, which accounts for 2.1% of the ETF’s roster, is another mega-cap tech name that the research firm is bullish on.
The Wedbush analysts are also constructive on several prominent themes, including cybersecurity, among others.
“This has created a massive land grab opportunity for those well-positioned cyber security vendors in 2022 with the right products/value proposition for CISOs (chief information security officers) that hit core pain points facing today’s IT departments,” they say.
Among the cybersecurity stocks they favor are Cyber-Ark Software (NASDAQ:CYBR), Fortinet (NASDAQ:FTNT), and Palo Alto Networks (NASDAQ:PANW). All three are members of GINN’s roster.
Several other GINN member firms are on the Wedbush list of 11 tech stocks for 2022. Those include Nice (NASDAQ:NICE), Tenable (NASDAQ:TENB), and Zscaler (NASDAQ:ZS).
Overall, technology stocks account for 34.6% of GINN’s roster — the ETF’s largest sector exposure. The healthcare and consumer discretionary sectors combine for 36.7% of the fund’s weight, according to issuer data.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.