One top strategist is calling the tech slump a major buying opportunity.
According to Oppenheimer Asset Management’s John Stoltzfus, the group will rebound because it plays a key role in the economy’s reopening. He cites the critical support tech companies provide to consumers and every sector of corporate America.
“We see the rollover in the Nasdaq to be actually an opportunity to add to positions that may have been a little more expensive just a few days ago,” the firm’s chief investment strategist told CNBC’s “Trading Nation” on Wednesday.
The tech-heavy Nasdaq dropped 2.7% to close at 12,997.75. The move came as the benchmark 10-year Treasury Note yield ticked up toward 1.5%. Rising yields have been putting pressure on the index because they place a ceiling on growth companies’ earnings multiples and signal inflation.
However, Stoltzfus isn’t worried.
“Without a doubt, we think some of the inflation that we’re seeing in the economic data really comes from the fact we’ve had disruptions in supply chains,” he said. “They tend to be related to the Covid pandemic.”
Stoltzfus, who has been on Wall Street since 1983, isn’t just bullish on tech. He also likes groups tied to the economic recovery such as financials, consumer discretionary and materials.
As for the broader S&P 500, Stoltzfus has a 4,300 year-end target, which implies a 13% gain from Wednesday’s close.