“There’s been an overwhelming love affair with some of these stocks irrespective of where they’ve traded,” Lehmann said.
The tech sector is bigger than these seven giants, and Lehmann noted it doesn’t make sense to lump this group together — after all, they’re very different from one another. Some, most notably Meta and Netflix, now face some big competitive challenges that are hurting their stocks.
“There has been a decoupling lately with Facebook struggling,” he said.
Forget the FAANGs
“PayPal has the best payment system,” he said. “My kids will Venmo their friends 90 cents. It’s a part of their life. They are not going to the bank.”
“Between geopolitical concerns and an increased digital transformation of the economy, there are long-term secular tailwinds for cybersecurity,” said Ivana Delevska, founder and chief investment officer of Spear Invest.
More M&A means value in takeover targets and acquirers
“Tech takeovers are alive and well,” Lehmann said.
With that in mind, one fund manager said that investors might want to buy the companies that are in good position to make deals…older tech firms with strong balance sheets.
“”When you see bouts of volatility like this year, that creates more of a stock picker’s market. There are great values in high quality tech stocks, not the super growth momentum stocks,” said Frank Lee, head of the investment strategy group at Miracle Mile Advisors.
“You want the companies that are generating cash now, and look for ones paying dividends,” Lee added.
“You have to do analysis on a name-by-name basis,” he said. “You can’t lump all of tech together in one moniker.”