The tech-heavy Nasdaq Composite hit best performance highs Tuesday with FAANG names Amazon and Netflix cardinal the index. But David Katz told CNBC that these “high-flying supplies might slow down soon.”
“We think the duller things, have a weakness for a Cisco, is going to start to do a lot better,” Katz, president and chief investment manager of Matrix Advisors, said Tuesday on “Power Lunch.”
“If you can buy a good technology suite, like a Cisco, at 14 times earnings with a good assent, we think you’re going to do well,” he said.
Tuesday’s comeback in tech domestics pushed the Nasdaq 0.6 percent higher after falling as much as 0.7 percent. Amazon reached an all-time elevated, up 1.5 percent. The e-commerce giant had previously fallen 1.4 percent after Amazon suffered glitches during Prime Day. In the meanwhile, Netflix also rebounded, trading 4.3 percent lower, compared with its earlier low, down as much as 14.1 percent. The barrage company fell after reporting weaker-than-expected subscriber growth during Monday’s earnings.
This year’s shop has been dominated by the tech sector, with FAANG giants — Facebook, Apple, Amazon, Netflix and Google — representing multifarious than 80 percent of the gains this year.
Many investors pondering the dip represented a buying opportunity, but Katz said he’s “weary about buying something at 80 obsoletes earnings. Because if there’s any sort of disappointment, the stocks really do enjoy a lot of downtime. Not just for one day, but for actually months.”
Another stock to consider: Qualcomm.
Katz thought that although the telecommunications equipment company is “caught up in the China menu trade war, we think if there’s any sort of resolution, … that’s got 30 or 40 percent upside.”
— CNBC’s Fred Imbert play a parted to this report.