Dan Ives Sees 25% Tech Stock Breakout — Micron And Three Bargain Stocks Stand Out

Core Viewpoint - Tech stocks are returning to bargain territory, with potential for a 25% upside in the sector, indicating a possible rerating rather than just a relief rally [1]. Group 1: Micron Technology - Micron Technology is experiencing significant momentum, with shares rising sharply and a forward P/E of 9.8x, highlighting a valuation gap for a company central to AI-driven demand [2]. - The focus is on the market adjusting to an earnings reset that is already in progress, rather than merely chasing momentum [3]. Group 2: Qualcomm - Qualcomm is considered interesting due to its low excitement factor, trading at a forward P/E of 14.5x and a PEG of 0.59, suggesting it is priced for stagnation [4]. - There is potential for multiple expansion if AI-on-device, automotive, or licensing stability exceeds expectations, which the market has largely overlooked [5]. Group 3: Cognizant Technology Solutions - Cognizant is characterized as a slower, services-driven company with a forward P/E of 14.5x and steady earnings growth, making it appealing in a stabilizing enterprise tech spending environment [6]. Group 4: Adobe - Adobe's recent underperformance has led to a valuation near a low-teens forward multiple of 14x, reflecting skepticism about growth durability despite intact earnings and sales growth [7]. - If AI monetization proves to be incremental rather than disruptive, Adobe's valuation could quickly normalize [7]. Group 5: Overall Tech Outlook - The bullish outlook for tech from Wedbush hinges on earnings durability and valuation catch-up, with parts of big tech currently priced for disappointment, setting the stage for potential upside [8].