Tech stock have taken a tumble this week.
After the tech-heavy Nasdaq hit a new all-time high last Wednesday, the index has fallen more than -9%.
And according to one trader, even with the rapid sell-off in some of the market’s most expensive stocks, it’s not quite time to start buying yet.
“I already own some of the big ones—Apple (NASDAQ: AAPL), AMD (NASDAQ: AMD), Salesforce (NASDAQ: CRM), Nvidia (NASDAQ: NVDA)—but we were trimming them on the way up and I’m not dying to buy any of these names just yet,” said Mark Tepper, president and CEO of Strategic Wealth Partners. “I don’t want to put any more new cash into any of them right now because I do think this correction has further to go.”
All four of those stocks have fallen by double digits this week. Apple has dropped more than -13%, AMD is down -12.5%, Salesforce is down -10%, and Nvidia shares are down -14% over the last week.
Out of the four, Tepper’s pick is AMD, “but at $80, it’s just way too expensive. If that thing were to drop down to $60 or $70, I’d be buying it, because we weren’t able to get a full position in it, as it kind of took off from us on the way up.”
Jefferies analyst Mark Lipacis is also bullish on AMD shares, writing in a recent note to clients, “We think that the bull case for AMD, which is based largely on AMD capturing 30% share from Intel (NASDAQ: INTC) over the two-to-three years, with more to a 50% market share bull case four-to-five years out.”
Lipacis rates AMD shares a Buy with a $95 price target – 20% higher than the price as of this writing.
However, there’s another stock Tepper has his eye on now that looks like its in a better position to be scooped up.
“The one name that we already own that I like right here is Cloudera (NYSE: CLDR),” Tepper continued. “I’d be buying more right now. This think was [at] $14 a week ago, just had a great quarter, and its down to $11, but nothing changed fundamentally. So, I would call that buyable pullback. I love the business. I love the price.”
Ascent Wealth Partners’ Todd Gordon says the tech sector’s recent weakness is “nothing more than profit-taking after five straight months of the market moving up… without any pullback.”
“I think there’s still a very bullish backdrop,” Gordon added. “Fundamental valuations have become a bit more reasonable – still extended but we’re in a new sort of normal. Some names that we would look to add for the first time would be Nvidia and AMD.”
Gordon agrees with Tepper about AMD’s potential and said the stock has remained in a “nice uptrend channel.”
“Keep in mind, we just broke about a 25-year upper range in AMD,” Gordon continued. “We broke up around $40-50. Any pullback is still supported about $60 in a nice parallel uptrend channel.”
Gordon added that there looks to be a buying opportunity forming in Nvidia as it nears falling below its 50-day moving average.
“We’re remaining constructive” in Nvidia, Gordon said, adding that his firm is also looking at adding to its positions in Activision Blizzard (NASDAQ: ATVI), Adobe (NASDAQ: ADBE), and Salesforce as prices continue to fall.