4 Trade War-Proof Tech Stocks The Smart Money Is Buying Now

Tech stocks have been beaten down as investors flee the sector, but these 4 stocks in the group are looking like safe havens even amid the sell-off.

Stocks started the day lower on Friday morning after President Trump told reporters that the U.S. will not do business with Huawei and is not yet ready to strike a trade deal with China.

Novice Traders Earn $86 Million In 5 Years Using This Blueprint 

Skeptical? Consider this: a small group of novice traders used this blueprint to earn $86 million in 5 years. It’s so easy to use that anyone regardless of age, gender, background, or education can follow it and potentially earn a fortune in the stock market. Learn this blueprint NOW and start using it immediately to eliminate all of your financial worries forever. [ad]

Click here for your money making blueprint

The Dow traded -0.8% lower, the S&P 500 fell -0.9%, and the Nasdaq sank -1% early in the trading day, with chip stock names like Micron (NASDAQ: MU) and Skyworks Solutions (NASDAQ: SWKS), which were both down nearly -4% at the time of this writing, leading the market lower.

But as the trade war heats up and the technology stocks sink lower, there are four stocks in the sector that are emerging as safe havens amid all the market turmoil.

Heavy hitters like Carl Icahn are turning to enterprise software names like Cloudera (NYSE: CLDR), Microsoft (NASDAQ: MSFT), Salesforce (NYSE: CRM), and Twilio (NYSE: TWLO) as these companies don’t rely as much on supply chains and manufacturing and thus aren’t as impacted by the trade war as the rest of the sector.

While these names aren’t entirely “tariff-proof,” they could hold up better than consumer technology companies that manufacture products in China, according to D.A. Davidson senior research analyst Rishi Jaluria.

“They’re a safe haven right now,” Jaluria said. “Software names are not exactly recession proof, but they’re more resilient to downturn.”

One ominous reason is the strong dollar.

The S&P 500’s technology sector—which does not include big names Amazon (NASDAQ: AMZN), Facebook (NASDAQ: FB), and Google-parent Alphabet (NASDAQ: GOOGL, GOOG)—is the most international of any other sector in terms of revenues, according to DataTrek Research, with 58% of sales coming from outside the U.S., compared to 39% for the S&P 500 overall. Materials is the only other sector that receives more than half of its revenue from overseas.

“That means global slowing hurts the sector more than the average S&P company,” DataTrek’s Nick Colas said.

And while Newton Advisors’ Mark Newton is bearish on the tech sector and recommends taking profits and getting out of most popular tech stocks, he said that “enterprise software is the standout that’s still resilient.”

Of these four stocks, Wedbush Securities managing director Dan Ives likes Microsoft.

“We believe large cap Microsoft is a compelling name to own with negligible China exposure and overall the software sector we would be buying here as it is primarily immune from the trade war,” Ives said.

Carl Icahn recently revealed a new stake in Cloudera, which has sent the stock surging more than 35% over the past month after hitting a bottom earlier this summer. The billionaire investor said on Thursday that, while he’s far from bullish on the broader market, Cloudera looks like an opportunity.

“There’s certainly some very interesting opportunities, but you have to worry about a full-scale recession,” Icahn said. “Cloudera is undervalued.”

Source: TradersPro.

There are risks inherent in all investments, which may make such investments unsuitable for certain persons. These include, for example, economic, political, currency exchange, rate fluctuations, and limited availability of information on international securities. You may lose all of your money trading and investing. Do NOT enter any trade without fully understanding the worst-case scenarios of that trade. And do NOT trade with money you cannot afford to lose. Past performance of an investment is not necessarily indicative of its future results. No assurance can be given that any implied recommendation will be profitable or will not be subject to losses. Information provided by the Company is not investment advice. The Company is not a registered investment adviser, stock broker, or brokerage. You agree that the Company does not represent, warrant, or take responsibility that any account will or is likely to achieve profit or losses similar to those shown. Examples published by the Company are selected for illustrative purposes only. They are not typical and do not represent the typical results of all stocks within the Company’s software or its individual scans and searches. No independent party has audited any hypothetical performance contained at this Web site, nor has any independent party undertaken to confirm that they reflect the trading method under the assumptions or conditions specified.