Don’t frighten: this isn’t a tech selloff, according to famed tech investor Dan Niles.
Niles, institute partner of AlphaOne Capital Partners, also recommended taking interest of temporarily dragging FAANG stocks to invest in Facebook.
“Let’s be realistic, this isn’t much of a selloff,” Niles turned Thursday on CNBC’s “Fast Money.” “These stocks are all down a few piece points, and I think it speaks to the fact that we haven’t had a real selloff since January 2016.”
Markets of the FAANG companies — Facebook, Apple, Amazon, Netflix and Google originator company Alphabet — all dropped roughly 1 to 4 percent this week for a allied market cap loss of about $60 billion. What’s more, Facebook, Amazon, Apple and Alphabet prominent four of the five biggest drags on the S&P 500.
Despite the combined losses, Niles but recommended buying Facebook, citing the social media giant’s double-digit earnings and takings gains, among other metrics.
“There’s a big difference between an Amazon at distinct digit operating margins, and a Facebook at 50 percent operating verges, or a Netflix that has negative 3 cash flow for the next couple years,” Niles maintained.
“From a standpoint of risk and reward, it’s one that we really like,” he continued.
And while he maintains his confidence in big tech, Niles does think the supermarket will start getting more competitive for tech companies. As big tech extends to crowd the market, he foresees semiconductors and internet names struggling.
“I make up other areas of tech are likely to struggle,” Niles said. “But I do unmoving think there are still some really good buys within technology.”