April 7 - A shift in investor sentiment could push money toward cybersecurity names as global trade tensions escalate, Wedbush Securities said in a Monday client note, citing ongoing tariff risks.
The firm pointed to Palo Alto Networks (PANW, Financial), CrowdStrike (CRWD, Financial), Zscaler (ZS, Financial), Check Point Software (CHKP, Financial), and CyberArk Software (CYBR, Financial) as potential "defensive" plays within tech, particularly as investors reduce exposure to semiconductors and pivot to more resilient software names.
Wedbush warned that prolonged tariffs could chip away at top-line results, with revenue estimates for some tech companies expected to fall between 5% and 10%. The longer the policy holds, the deeper the potential drag on growth, the analysts said.
Broader enterprise demand could also weaken, leading to delays in large software deals. Still, Wedbush highlighted that companies like IBM (IBM, Financial), Microsoft (MSFT, Financial), Oracle (ORCL, Financial), ServiceNow (NOW, Financial), and Salesforce (CRM, Financial) may weather cost pressures better than hardware-heavy firms.
Despite the defensive rotation, Nvidia (NVDA, Financial) and Apple (AAPL, Financial) remain the firm's “core holdings,” due to their entrenched user bases, innovation edge, and long-term growth runway.
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