tech sell-off could be ‘short-lived’

Nasdaq Composite is now down 9.0% YTD as investors continue to dump technology on fears of inflation and aggressive rate hikes, but Defiance ETF’s Sylvia Jablonski Kampaktsis says she still likes the top FAANG names.

Kampaktsis’ bull case for the FAANG stocks

Kampaktsis sees the ongoing sell-off in the mega-cap FAANG stocks as a buying opportunity, particularly for the longer-term investors. This morning on CNBC’s “Squawk Box”, she said:

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These names are up to 30% off their 52-week highs. So, it’s a great time to get into some of these names. Yes, you’ll have to hold on to them a little bit longer to watch them play out, but if you have cash on the sidelines, I still think equities are the place to be.

According to Kampaktsis, secular technological growth trends like cloud, cybersecurity, 5g, web 3.0, and the metaverse are solid long-term catalysts for the FAANG stocks. The “N” in FAANG, for her, however, stands for Nvidia Corp and not Netflix Inc.

The market is overreacting

The tech-heavy Nasdaq Composite slipped below its 200-day moving average, but Kampaktsis says the market is overreacting to the tightening monetary conditions. She added:

I think once earnings come out, we hear from leaders and see this continued trend of 70% of companies beating earnings and the amount of cash remaining on the balance sheets, I think this correction could be shorter-lived than we expect.

Her view matches RDM Financial’s Michael Sheldon, who said a day earlier that he was constructive on the stock market for 2022 despite a rough start to the year. The benchmark S&P 500 index is also down about 5.0% this month.