The Nasdaq 100 index is still down more than 10% for the year as investors continue to be nervous about technology amidst record inflation. Still, KAR’s Julie Biel says a subsector within this space is ripe for investment.
Biel’s remarks on CNBC’s ‘Squawk Box Asia’
According to Biel, tech companies that provide niche-specific software are well-positioned to survive inflation and regulatory scrutiny. On CNBC’s “Squawk Box Asia”, the portfolio manager said:
I like the mid and small-cap tech names that are in vertical software. These businesses are well-positioned to avoid regulatory scrutiny, there’s high barrier to entry, there’s earnings; you can actually do a PE on them, and they’re in a position to do well even if we tip all the way into recession.
One such name is Tyler Technologies Inc (NYSE: TYL) that’s down over 10% from its high in mid-November. Another is nCino Inc (NASDAQ: NCNO) – a Wilmington-headquartered fintech firm that has lost 35% in about five months.
Inflation climbed to 7.5% in January
A day earlier, the U.S. Bureau of Labour Statistics said inflation climbed again to 7.5% in January, which, as per Biel, now calls for a more aggressive response from the central bank. She noted:
Inflation will be persistent as long as the supply chain depends on goods from Asia. And Asia is a region that generally has zero COVID policies. So, inflation will be an issue as long as there’s COVID. So, I think it’ll take time, and a more aggressive approach makes sense.
The economic data on Thursday had Fed’s James Bullard urge a 100 basis points increase in the interest rate by July 1st. There’s talks of up to seven rate hikes in total this year.
The post What tech stocks to buy after inflation jumped to 7.5% in January? appeared first on Invezz.
Source: https://invezz.com/news/2022/02/11/what-tech-stocks-to-buy-after-inflation-jumped-to-7-5-in-january/