My Favorite Tech Stock for a Hawkish Fed
Tech stocks experienced a massive plunge after Federal Reserve Chairman Jerome Powell told investors his priority was taming inflation. Indeed, that is bad news for stocks in the short term. To slow the pace of rising prices, Powell will likely continue to hike interest rates, reducing the availability of capital.
But such conditions should play into the hands of Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG). Google's parent company depends less on consumer spending than Apple or Amazon, and its business lines, financial position, and valuation should increase the appeal of its stock in more-challenging times.
You might not think of Alphabet as a recession-resistant business. It traditionally derived revenue from advertising on its search engine and YouTube video platform. With consumers presumably having less income available to spend, advertisers might not want to spend, either.
Source Fool.com
