Goldman Sachs sees 20% downside in these tech games

If you own any of these popular tech names, it might be time to bail out

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Knowing what to buy and what to sell is important to balance a diversified portfolio.

To get some ideas on which stocks could fall out of favor, it’s worth taking a look at what Wall Street analysts have to say. Although they are human like the rest of us, many analysts at major Wall Street companies have solid backgrounds and can be a useful source of buy recommendations – or, in this case, to sell recommendations.

Let’s take a look at two popular tech stocks that investment banking giant Goldman Sachs recently gave a “sell” rating on.

If any of these stocks is sitting in your wallet, it may be wise to be extra careful.

Twitter (TWTR)

Topping our list is the social media giant Twitter, which Goldman launched with a sell note last week.

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Goldman analyst Eric Sheridan planted a price target of US $ 60 on the stocks, almost exactly where they sit today.

Sheridan has a generally positive view of the entire US internet industry, suggesting there is still plenty of room for long-term growth and improved operational efficiency. But in the case of Twitter, the analyst believes its valuation is stretched and that the company’s innovation is largely a ‘show me a story’.

Specifically, Sheridan is not convinced that Twitter will be able to appeal to a larger audience in the long run or capitalize on the niche monetization opportunities presented by its current audience base.

Sheridan says Twitter is more of a publishing platform than a social media platform like Facebook or Snap, which he both recommends as a buy. Twitter shares fell 5% last week in response to Sheridan’s point of view.

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Airbnb (ABNB)

The next step is leader in Airbnb vacation rentals, which Sheridan also launched with a sales note last week. The analyst set a target price of US $ 132 for the stock, which is about 20% down. Airbnb shares quickly fell 5% last week following Sheridan’s bearish call, but have since recovered significantly.

Sheridan has said good things about Airbnb, calling the company a market leader in the field with attractive growth and margin expansion opportunities.

In fact, the analyst expects compound annual revenue growth of 21% over the next five years and an adjusted profit margin of 32% in 2026. So for growth-oriented investors, Airbnb might be worth worth buying using just your spare change.

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But at current valuation, Sheridan believes Airbnb’s risk / return tradeoff is negative due to the volatile travel environment going forward, a mature end-market, and increasingly intense competition. .

Follow your own path

There you have it: two popular tech stocks that Goldman Sachs recommends you sell today.

Instead of high-profile volatile internet stocks, risk-averse investors might prefer to stick with more stable, inflation-sheltered assets.

Those looking to take control of their investments should definitely explore online trading platforms. The best sites offer resources and tools to help investors make informed decisions when building and managing their investment portfolios.

Or, if you are looking for something really different, try investing in shares of the greatest masterpieces in the art world by artists like Banksy, Monet and Warhol.

This article was created by Wise Publishing. Wise is dedicated to providing information that helps readers navigate the complex landscape of personal finance. Wise only associates with brands he trusts and believes can be of use to the reader. This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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