Although the recent tech crisis has cast a pall over the sector, long-term investors should still consider big tech names like Amazon ( AMZN ), according to Jefferies senior research analyst Brent Till (video above).
“Look, technology is at a premium right now,” he told Yahoo Finance. “It’s not where people want to be; they want to be in other sectors… I think the chance at the end of the day is to avoid this for three years, and you’ll be much happier after three years.”
Till is currently optimistic about Amazon. Amazon Web Services, the company’s cloud business, has grown, and while the company’s retail business is currently being overshadowed, it expects business to bounce back.
“Amazon is not where the consumer is right now,” Thiel said. “We’re all traveling. We’re not spending money online. We are [instead] Spend money on restaurants, direct shopping, travel, airlines and hotels. Therefore, I think long-term investors have the opportunity to buy the stock and we think that retail business will return to fashion. It’s out of fashion now.”
However, he’s not expecting the rebound to be immediate.
“Before that, I think it will take until 2023 [e-commerce] “The business will really find its footing again,” Till told Yahoo Finance. “I think consumer spending will move away from where Amazon’s core is, but over time I think it will come back and return to growth and better margins.”
In addition, Till still thinks that new CEO Andy Jassy will “prioritize where they are.” [Amazon] It can make money” and is looking for “predictable and recurring revenue”, which is considered a positive in Amazon’s history.
Amazon is set to report earnings on Thursday.
Not all is optimistic
Till’s enthusiasm shouldn’t translate to other names in big tech, including Twitter (TWTR).
“I think the Twitter business right now is basically a disaster,” he said. “You see reports of layoffs, workers working eight hours. The feeling inside is horrible and you see executives fleeing that place like flies. So, in the short term, I think they have to do it. Right the ship.”
Much of Twitter’s future hinges on how the company’s court battle with billionaire Tesla CEO Elon Musk plays out. For Till, he’s driven by the idea that the dispute can be resolved, at least in part, in Twitter’s favor. In April, Musk first offered to buy Twitter for $44 billion, or $54.20 a share — and the company’s stock is now down to $39.08 at the open this morning.
“I think we’re all hoping something is done and maybe not at the original price of $54.20,” he said.
Ali Garfinkle is a senior technology reporter at Yahoo Finance. Find her on Twitter @agarfinks.
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