The first half of 2022 is over. And it was a doozy for Wall Street. The S&P500 dropped more than 20% in just six months. Indeed, technology stocks have been decimated. This is the worst market performance in the first half for more than 50 years!
Many investors are panicking. They are reasonably afraid.
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But smart investors actually get bullish. This is because the data suggests that following such a disastrous stock market performance, a huge rally may come next.
Specifically, we could see a huge rally of over 50% in all tech stocks and a rally of over 100% in some high-growth stocks.
So while many investors are fleeing the market, you and other smart investors will be fleeing. towards this. And 12 months from now, when you’re sitting on triple-digit earnings in some tech stocks, you’ll be glad you did.
Here’s a closer look.
The best of times follows the worst of times
In the stock market, the best times often follow the worst times.
This is especially true for tech stocks.
The Nasdaq, which is mostly comprised of tech stocks, lost more than 30% of its value in the first half. This puts the index on track for its worst year already.
These huge down years for the Nasdaq are rare. In fact, in the past 20 years, it has only fallen by more than 20% twice, in 2002 and 2008.
Guess what happened in 2003? The Nasdaq jumped 50%. Guess what happened in 2009? He flew over 50%.
These are the two best years for the index in the past 20 years.
In other words, the Nasdaq’s two best years in the century immediately followed its two worst years.
When it comes to tech stocks, the best of times always comes after the worst of times.
Right now we are in the worst case scenario. It’s worse than what happened in 2002 or 2008. It’s the biggest drop to date.
Historically, then, what comes next will be the biggest gathering to date. Based on this data, it’s not unreasonable to expect tech stocks to climb 60%, 70% or more in 2023!
But some high-growth stocks will rebound much more than that…
Find Alpha in High Growth Tech Stocks
When tech stocks make a huge “comeback” of over 50% like in 2003 and 2009, some high growth stocks tend to go up over 100%.
In 2003, for example, the Nasdaq rebounded about 50%. In the same year, high-growth tech stocks climbed much higher. Avaya (NYSE:AYA) jumped nearly 400%. Novell jumped 215%. Corning (NYSE:GLW) increased by 210%. yahoo won about 170%.
At the time, all were high growth stocks.
It’s the same story in 2009. The Nasdaq rose more than 50% that year. Leading the rally were high-growth tech stocks like Advanced micro-systems (Nasdaq:AMD), Qorvo (Nasdaq:QRVO), Seagate Technology (Nasdaq:STX), Expedia (Nasdaq:EXPE), Amazon (Nasdaq:AMZN), and Reservation (Nasdaq:BKNG). These shares increased from 160% to 350% in 2009.
The pattern here is surprisingly simple.
When tech stocks crash in one year, they tend to rebound strongly the following year. In these massive rebounds, high-growth technology tends to lead the way. Many are rallying 100%, 200%, 300% or more in a single year.
This pattern repeats itself today.
Tech stocks are crashing in 2022. They will rebound strongly in 2023. When they do, many high-growth tech stocks will double, triple, or even quadruple.
In other words, what we have before us today is a generational buying opportunity ahead of the biggest tech rally of the century in 2023.
The Last Word on Tech Stocks
The four most dangerous words in investing are “this time it’s different.”
That’s why I say this time is not different.
Tech stocks are down sharply in 2022. Every time they suffer a horrible year like this, they rebound quickly and significantly the following year. During these rallies, many high-growth stocks tend to rally hundreds of percent.
This time will be no different.
We expect a massive tech rebound in 2023, fueled by falling inflation and a subsequent 180-degree pivot from the Fed on rate hikes and quantitative tightening.
In preparation, we have identified several high-growth tech stocks that are poised for 2X, 3X, and even 4X plus gains next year.
In particular, we have identified a small stock AV which 99% of investors have never heard of. But he could be about to announce a successful partnership with Apple (Nasdaq:AAPL)…
This is a title that could be the biggest winner of the “tech turnaround” of 2023.
Find out more today!
As of the date of publication, Luke Lango had (neither directly nor indirectly) any position in the securities mentioned in this article.
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