Mel Lagomasino on Bloomberg: Will Tech Stocks Continue to Rally?

August 15, 2022

 

Friday’s closing bell marked another week of gains for tech stocks, with the tech-heavy Nasdaq 100 posting its fourth consecutive weekly gain and longest rally since November 2021. With tech now broadly outperforming equity markets, Bloomberg turned to WE Family Offices CEO and Managing Partner Mel Lagomasino for her unique perspective on tech’s recent performance, Q2 earnings, and where she believes investors may be able to find opportunities in the sector.

“I think it’s been a great month for tech, and I think it has to do with the fact that people are starting to believe that we are going to get inflation under control,” says Lagomasino. “Inflation is what will kill the earnings for tech companies, so I think the mood is positive because they see that inflation is going to come down.”

Now that the bulk of earnings season is over, Bloomberg’s Ed Ludlow also turned to Lagomasino for her thoughts on the main takeaways from this earnings season, specifically for mega-cap companies.

“In general, many companies exceeded expectations, both on the revenue side and the earnings side,” explains Lagomasino. “I think the name of the game is not going to be revenue. I think the name of the game is going to be earnings and what happens with earnings. Earnings always look backward; you’re looking back at the last quarter. The big question with earnings is what will happen in the next two quarters. That’s why I think the good news about getting control of inflation is causing this rally.”

Looking toward the future, historically, tech stocks’ second half of the year tends to outperform the first half. With a third-quarter tech rally in full swing, Lagomasino believes it is hard to predict if this performance will continue for the rest of 2022. However, she is optimistic about its path in 2023 due to companies’ reliance on tech for productivity.

“I think we are definitely going to see tech continue to improve,” says Lagomasino. “I think earnings over time will be great for tech companies. Actually, in slower growth periods, tech tends to do quite well.”