A sustained recovery in tech is becoming increasingly unlikely, according to Bank of America.
Tech is the third-worst performing sector in the S & P 500 , down roughly 20% for the year — on pace for its worst annual decline since 2008, when it dropped 43.7%. To be sure, the sector has also posted yearly gains in each of the last three years, and it's risen in 12 of the last 14 years.
"Since 2018, real rates have shown a strong inverse correlation vs. the relative performance of Russell 1000 Growth over Value, indicating lower rates fueled Growth stocks over Value." That said, there are some beaten-down stocks in the space that Bank of America thinks can do well near term. The firm highlighted several tech and telecommunications stocks that are down more than 25% from their highs but sport strong free cash flows. Chipmaker Qorvo is on Bank of America's list.
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