Paul Meeks is wary of the group that made him famous on Wall Street.
The investor, known for running the world’s largest technology fund during the late 1990s, says it’s the wrong time to aggressively put money to work in tech.
“You have to play it within the sector as defensively as possible,” the portfolio manager at Independent Solutions Wealth Management said Tuesday on “Trading Nation.”
Meeks doesn’t cite fundamental issues for his cautiousness.
“I just worry about the increased rise in rates,” said Meeks, who also teaches finance at The Citadel. “I need to see at least the 10-year [Treasury Note yield] stabilize for a while.”
Due to the challenging backdrop, Meeks believes tech investors need a Plan B. His best advice is to target semiconductors, which he has been overweight since June 3. Since that move, the VanEck Vectors Semiconductor ETF, which tracks the group, is up 68%.
“I do like semiconductors. A semiconductor should be relatively defensive. Strong fundamentals,” said Meeks. “Everybody knows that there’s a voracious demand for a lot of chips, and scarce supply.”
His top play within the group is Microchip Technology, which he has owned for months. With the stock rallying 10% over the past two months, he calls it a little expensive. But according to Meeks, it’s a name to consider buying due to the supply chain clog. He expects it’ll last into next year.
He also favors Analog Devices, Texas Instruments and NXP Semiconductors as longer-term plays.
“There are opportunities there,” Meeks said. “That’s what I would do if you have to be in the tech sector at all.”
On Tuesday, the tech-heavy Nasdaq closed at 13,045.39, about 8% below its all-time high, hit on Feb. 16.
Disclosure: Paul Meeks owns the stocks he recommends. He is not shorting any stocks.
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