Tech stocks could experience a major pullback in the short-term, including Apple (NASDAQ: AAPL).
That assertion is the sentiment of perennial tech investor Paul Meeks, who has taken a brief about-turn from his bullish forecasts to warn other investors in the sector.
According to Meeks, investors are likely to get burned by these tech stocks, despite a contrary sentiment that forecast AAPL surging by up to 70% within the next 24 months.
Speaking to CNBC during the “Trading Nation” show, tech stock investor Gene Munster predicted that the Apple stock would rally to become the best-performing stock among the FAANG stocks.
But Meeks thinks otherwise, noting that the rally has simply “gone too far,” and is a wee too fast. He added that the main issue isn’t the fundamentals, but the fact that valuations are much stretched.
Notably, tech-heavy Nasdaq showed signs of further spikes, surging to an intraday new all-time record of 8, 176.08- over 30% higher than it in December last year.
Following this pattern, Meeks posits that should there be “any whiff” of [just] a slight disenchantment; the market could see a number of the big tech stocks plummet.
Similarly, Meeks warns that a crashing pullback could hit the semiconductor stocks that have ideally rallied in tandem with the tech sector. To him, the glut within the chip industry doesn’t show any signs of abating and that could be a problem.
Perhaps more worrying would be Meeks’ take on the Apple stock. For a man who at one time headed Merrill Lynch’s tech fund in the dot-com era, the iPhone maker will not escape the next market sell-off.
He noted that Apple could be “overvalued at this level,” and that the California-based company’s services business may not be all great at the moment. Incidentally, Apple’s earnings report for Q2 showed that the stock was surging even as earnings declined.
The tech giant realized profits for the quarter but year-over-year earnings had declined. But AAPL surged more than 5% in after-hours trading. On the other hand, Amazon (NASDAQ: AMZN), recently hit a record with a seven-week consecutive surge- the best move in a decade.