‘multiple silver linings are being overlooked’

Tech stocks continue to feel pressure on Wednesday as the U.S. Bureau of Labour Statistics said CPI remained above 8.0% in April. Still, Jared Weisfeld says “multiple silver linings are being overlooked”.

Large cap tech is now reasonably valued

While inflation and rate hikes continue to be a headwind for technology, the Jefferies expert sees signs that implore confidence in the sector as well. On CNBC’s “Squawk Box”, he said:

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Look at large cap tech, very reasonable valuations of 12-13 times EBITDA. While there’s a ton of selling pressure, private equity is emerging as a strategic bidder. We’ve had $70 billion of M&A over the last two to three months at very full valuations.

According to Weisfeld, tech could be in for a “vicious rally” as soon as CPI prints start to turn more benign. Nasdaq Composite is down roughly 27% for the year at the time of writing.

What else does he see a positive for the tech space?

Semiconductor stocks have recently started to outperform the benchmark, which, as per the Jefferies specialist, is another positive sign for the tech space. Speaking with CNBC’s Joe Kernen, he noted:

Over the last three to four weeks, semiconductor stocks are starting to outperform relative to the S&P and earning season has been really strong from a semi standpoint. So, I think there are pretty significant silver linings underneath the surface.

Last week, ISWM’s Paul Meeks also said he wouldn’t go all in tech, yet, but he’d surely start to selectively look for opportunities in this space now.