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Our theme of Value Tech Stocks – which is comprised of tech stocks with a market cap of over $5 billion and a price to earnings multiple of under 20x
So what’s the outlook like for the theme? There have been concerns that the U.S. could be headed for a recession, with Q1 GDP already shrinking year-over-year. Moreover, the Federal Reserve is also eyeing interest rate hikes of about half a percentage point over June and July. This could prove a headwind for the broader markets. That said, the value tech theme remains a good play on secular trends such as increasing digitization of the economy following Covid-19, and higher corporate IT spending, and we think it should continue to hold up better than the broader tech index. Moreover, many of the names in the theme are mature tech companies that are incumbents in their respective segments and this could provide some safety in the current environment.
Facebook is the most valuable company in our theme, with a market cap of over $550 billion. The stock has declined by around 44% year-to-date. Skyworks Solutions
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