The tech giants weighed on the major Wall Street indices at the start of this week, leaving investors questioning if it will worsen in the upcoming weeks.
Paul Meeks joined CNBC’s Trading Nation on Wednesday
Paul Meeks of Independent Solutions Wealth Management warned on CNBC’s “Trading Nation” on Wednesday that the rising inflation and associated fears of a tighter monetary policy could indeed translate into a sharper pullback in the tech stock.
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“The carnage that we’ve seen over the last couple of days, unfortunately, could only be the start of it,” said Meeks, who ran the largest technology fund in the world in the late 1990s. While the large-cap technology stocks helped Wall Street rebound on Thursday, Meeks still warned:
“We’ve already had a beating in the tech sector close to about 10%. I think we could easily do another 10%, despite strong earnings and guidance from major tech companies.”
Apple shares opened 1.5% up on Thursday and gained another 0.5% in the next hour. Facebook and Amazon also jumped 1.0% in premarket trading. Tesla opened just under 2.0% up on Thursday after announcing that it will no longer accept Bitcoin as payment.
Meek acknowledges that fundamentals for the tech sector are healthy
On the other hand, Meek acknowledged that fundamentals for the tech sector are sufficiently healthy, and it was the fear associated with higher interest rates that made it difficult to predict its near-term future.
“Don’t give up on tech. It’s always the most innovative companies on the planet Earth. It’s always where you want to be. They’re going to have some great buying opportunities. But it’s going to be a bit lower,” he added.
Meeks also highlighted that he has turned positive on Cryptocurrencies, having called the space too speculative in the past. He further clarified that he would still not recommend putting the money in crypto coins, but derivative plays, including Coinbase, PayPal, and Square, could result in a fair bit of returns for investors. Meeks said:
“I like those plays. And I do, long term, like the semiconductor trade. Not short term, because it’s highly volatile, but long term, I do like Micron very much and Applied Materials, which is a maker of semiconductor equipment.”