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After years of an unabated bull market in tech stocks, investors may be finally beginning to take note of the shortcomings in tech shares. Bloomberg’s Lu Wang reports that after the tech-focused Nasdaq index fell more than 1% on Monday, some analysts are calling out the sector’s risk. Wang writes:
Mike Wilson at Morgan Stanley on Monday reiterated his bearish call on tech high-flyers, urging investors to seek safety in shares with cheaper valuations as the market is likely to be headed for the biggest correction since February. While the magnitude of losses is no worse, the pain for active funds will be more pronounced should money start to rotate out of their favorite industries, such as tech.
“The selling has just begun,” Wilson wrote in a note to clients. “It could very well have a greater negative impact on the average portfolio if it’s centered on tech, consumer discretionary and small caps, as we expect.”
The tech-heavy Nasdaq indexes fell more than 1 percent Monday, more than double the declines in the S&P 500 Index and the Dow Jones Industrial Average.
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