Markets have been upside-down ever since mid-November 2021. The reasons for this tumultuous market condition are higher than expected inflation rates, rising interest rates, slowing consumer growth, and, more recently, renewed lockdowns in China.
Global IT companies’ forward PE is now around 21, which is low for technology stocks. Average EPS growth is expected to be around 15, which raises the question of which IT companies are worthwhile looking at. A first way of going forward in seeking an answer to this mission is to consider the following: Global consensus estimates were reduced by around 2 basis points on the back of weaker consumer demand for products containing semiconductors, computer hardware, and other digital tools. On the other hand, corporate IT spending remains robust mainly driven by cloud services, IT security, and digital transformation leading toward a higher level IIoT.
Going forward: we expect that the market will remain relatively volatile until the interest rate cycle has topped out. All list members are highly attractive IT companies and key enablers and leaders in their market segment.