The mega-cap technology names served as a safety net for investors amidst the global pandemic, as evident in the price action over the past two years. But outlooks are now starting to change.
Paul Meeks’ only pick in the FAANG stocks
This morning on CNBC’s “Squawk Boxâ€, ISWM’s Paul Meeks said the only FAANG stock he could get behind at this point in time was Alphabet Inc (NASDAQ: GOOGL) that is already up about 70% in the stock market this year.
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Within the FAANG stocks, the only one that I really favour at this point for valuation and some fundamental reasons is Alphabet Inc. Others, I think, all have either valuation concerns or some really specific, scary in some cases, fundamental issues.
Also on Wednesday, Pfizer said preliminary data from lab studies shows a booster dose of its COVID-19 vaccine neutralizes the new Omicron variant. So, the “safety net†might lose its popularity in the coming months.
Meeks is bullish on the semiconductor space
Meeks, however, is bullish on technology as a whole. Within the sector, he’s particularly interested in the semiconductor companies, except for the big shot names like Nvidia and AMD, chiefly because of beefed-up valuations.
In semiconductors, you get some reasonable valuations. There are some companies that have at least semi-lagged but have bright fundamentals confirmed in their last quarterly conference calls. I’m thinking companies like Micron and Qualcomm.
In October, Micron CEO Sanjay Mehrotra announced plans of investing $150 billion over the next ten years in chip manufacturing, and R&D. Hightower’s Stephanie Link also has a similar outlook of the tech space.
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