Gene Munster Predicts Tech Stocks Could Drop Another 5%
Top tech analyst turned venture capitalist Gene Munster anticipates further short-term declines in major tech stocks but remains optimistic about the sector’s long-term potential.
Recent market turbulence saw the Dow Jones Industrial Average (DJIA) and S&P 500 endure their steepest two-day decline in over eight months, with technology stocks bearing the brunt of the sell-off. Investor anxieties over tightening monetary policies, escalating trade disputes, and geopolitical uncertainties, combined with worries about increased regulation on tech firms, pushed the Nasdaq Composite Index into correction territory. Amid this backdrop, Gene Munster, a leading tech analyst turned venture capitalist, foresees additional challenges ahead for tech stocks, though he highlights Apple Inc. (AAPL) as a resilient standout.
(Also see: Understanding the Current Market Sell-Off)
Apple Positioned to Weather Short-Term Tech Sector Volatility
Speaking on CNBC's "Squawk Box" before the market opened on Thursday, Gene Munster, founder of Loup Ventures, cautioned investors to prepare for continued selling pressure in the technology sector. He projected an additional 5% decline for major tech players such as Netflix Inc. (NFLX), Amazon.com Inc. (AMZN), and Facebook Inc. (FB), though he did not specify an exact timeline for this downturn.
Munster emphasized that Apple stands apart due to its advantage from rising average selling prices (ASP) for its product lineup. Despite short-term headwinds, he remains confident in the tech sector’s overall growth potential.
"While near-term market sentiment tends to follow historical patterns of volatility, I remain bullish on the broader technology industry for various strategic reasons," Munster explained.
In July, Munster predicted a divergence within large-cap tech stocks over the next six to twelve months, suggesting the sector can no longer be viewed as uniformly safe. He identified Apple and Alphabet Inc. (GOOGL), Google’s parent company, as leaders likely to outperform.
On Friday morning, tech stocks showed strong recovery in pre-market trading. Netflix and Facebook, which suffered significant losses earlier in the week, rebounded nearly 5% and 2.1%, respectively. Amazon shares climbed 4.1%, while Google and Apple rose 2.2% and 2.5%.
(For additional insights, see: Bitcoin Plummets Amid Global Market Sell-Off)
If you have news tips for Investopedia reporters, please email us at tips@investopedia.com.
Discover engaging topics and analytical content in Markets News as of 17-10-2018. The article titled " Gene Munster Predicts Tech Stocks Could Drop Another 5% " provides new insights and practical guidance in the Markets News field. Each topic is meticulously analyzed to deliver actionable information to readers.
The topic " Gene Munster Predicts Tech Stocks Could Drop Another 5% " helps you make smarter decisions within the Markets News category. All topics on our website are unique and offer valuable content for our audience.