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Trivariate Research suggests purchasing high-quality tech stocks that are resistant to inflation and interest rate hikes.



In a time when inflation is at a generational high and investors are concerned about the impact of high interest rates on their portfolios, Trivariate Research has identified certain stocks that may help hedge against these risks more effectively. According to Trivariate Research founder Adam Parker, there has been a shift in the relationship between interest rates, inflation, and stock prices since the all-time low interest rates seen post-Covid. This has resulted in a zero correlation between high-quality growth stocks and inflation, indicating that these stocks are less affected by rising inflation than they used to be.

Trivariate Research has highlighted a basket of high-quality technology stocks that show a near-zero correlation to inflation. Keysight Technologies, a company specializing in electronic equipment, is one of the stocks on this list. Despite a 10% decline in share price this year, Keysight has been named a “top pick” by Morgan Stanley, which believes that the stock’s valuation is reasonable and that stable orders could act as a catalyst for growth. Another company included in Trivariate’s basket is Procore Technologies, a provider of management software for the construction industry. JPMorgan has named Procore one of its top picks due to its leading position in the construction-focused software as a service market and its significant global total addressable market.

Cloud-computing stock Nutanix has seen a significant increase in share price this year, leading Raymond James to upgrade the stock to an outperform rating. The firm believes that Nutanix has the opportunity to gain market share from VMware following its acquisition by Broadcom, as customers may seek alternative solutions due to price hikes and bundling by VMware. Overall, Trivariate Research’s basket of high-quality growth stocks in the technology sector offers investors the potential to navigate the current inflationary environment with less risk than traditional growth stocks.

As inflation remains a concern for investors, the ability to identify stocks that are less susceptible to the impact of high interest rates and rising prices becomes increasingly important. Trivariate Research’s analysis suggests that high-quality growth stocks in the technology sector may offer a more resilient option for investors seeking to hedge against inflation. With a zero correlation to inflation, these stocks could provide a level of protection against the risks associated with a high inflation environment. By considering stocks like Keysight Technologies, Procore Technologies, and Nutanix, investors may be able to build a more robust portfolio that can weather the effects of inflation and interest rate fluctuations in the current market environment.

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