The tech sell-off sparked by hawkish Fed minutes is a major buying opportunity for investors, Wedbush says

• A deep sell-off in technology stocks has created a massive buying opportunity for investors, according to Dan Ives of Wedbush.
• The Nasdaq fell more than 3% on Wednesday after minutes from the Fed revealed the potential for quicker-than-expected interest rate hikes.
• "Many of the secular tech winners we believe will drive the 4th Industrial Revolution are now in oversold territory with valuations we find very compelling," Ives said.
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A Fed-driven sell-off in technology stocks is creating a massive buying opportunity for investors, according to a Wednesday note from Dan Ives of Wedbush.

The Nasdaq 100 plunged more than 3% on Wednesday after minutes released by the Federal Reserve revealed the potential for quicker-than-expected interest rate increases and quantitative tightening later this year. Ark Invest's flagship ETF sold off as much as 7% and is down 12% year-to-date.

But the broad decline in fast-growing technology stocks represents a "get out the shopping list" moment for investors willing to buy downward trending stocks, according to Ives.

"Many of the secular tech winners we believe will drive the 4th Industrial Revolution are now in oversold territory with valuations we find very compelling given the outsized growth prospects over the next 12 to 18 months," Ives said.

Ives warned that 2022 will likely remain very volatile for tech investors as the Fed combats inflation with hawkish policies, supply chain disruptions continue to impact semiconductors, and COVID-19 variants continue to spread. But that volatility is par for the course when buying tech stocks with strong growth prospects at bargain prices.

"While the December Fed minutes were the straw that broke the camel's back after a brutal start to the year for tech investors, we caution this is not the time to throw in the white towel on the tech bull cycle," Ives said, pointing to the continued prospect for governments and enterprises to spend $1 trillion on cloud services over the next decade.

Cyber security, 5G connectivity, and big data are additional fuel to stoke the ongoing growth in technology companies, according to Ives.

"While we can fret about the Fed, 10-year spikes, and macro noise, the underlying growth in the tech sector (which is being underestimated by investors) is unparalleled to any period of time we have seen in the last 21 years," Ives said.

Tech stocks that should be on investors shopping lists, according to Ives, include Apple, Microsoft, Zscaler, Palo Alto Networks, and Matterport, among others.