Is It Time To Buy Netflix And Alphabet Again? Experts Say Beaten Down Tech Stocks Are Value Plays

Tech stocks have been hard-hit this year as investors worry about the Federal Reserve raising interest rates: The tech-heavy Nasdaq Composite index tumbled 4% on Tuesday, falling further into bear market territory and hitting its lowest level since 2020.

“We’re in a period where tech companies are being sold off and investors are nervous, so the downside is brutal, but that also creates an opportunity,” says Charles Lemonides, founder and chief investment officer of ValueWorks, adding, “it’s time to start building positions at the very least.”

A big earnings miss last week from Netflix, which said it lost subscribers for the first time in over a decade, as well as lackluster results from Google-parent Alphabet on Tuesday, has added to recent uncertainty around Big Tech stocks.

Lemonides remains bullish, insisting that Netflix has “adapted to challenging moments before,” while investors “shouldn’t read too much into the choppiness” with Alphabet’s earnings miss, as both companies are “still putting up huge numbers.”

He says his firm is now looking at many of the other FAANG stocks in a similar way to Netflix after its big sell-off, calling it territory that deserves to be looked at more closely” amid the “huge volatility” in markets.”

Fundstrat Global Advisors’ founder and head of research, Tom Lee, similarly told CNBC that the FAANGs now look like value stocks, pointing out that they “are still going to grow double digits,” adding, “I don’t think there’s a lack of future growth catalysts.”