Blue-chip tech stocks on rare double-digit discounts

For patient and prude investors, the market slide represents an opportunity to add or bulk up their tech positions with high-quality names

Vikram Barhat 5 June, 2019 | 5:00PM

The market rodeo over the past few weeks has been making many an investor’s stomach turn. As Beijing digs in its heels deeper on trade against Trump, escalating the game of chicken with more ominous threats of hitting the U.S. where it hurts most, there appears to be no end in sight of the trade war and, resultantly, of the stock market volatility.

The tech sector makes up a quarter of the market cap of the S&P 500 and any volatility in the sector triggers a cascading effect on wider markets. The sector’s recent wild ride is clearly evident in the Morningstar U.S. Technology Index which has fallen nearly 10% month-to-date (expressed in U.S. dollars) and in the more than 8% loss for the S&P Technology Select Sector Index for the same period, as of May 31.

For patient and prude investors, though, this market slide represents an opportunity to scour the tech sector for mispriced blue chips companies. The largely sentiment-driven sell-off has created attractive entry points for some tech heavyweights that have shed 4% to 16% of their valuation. Long-term investors looking to add or bulk up their tech positions with high-quality names may want to capitalize on the recent tech rout.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Alphabet Inc Class C1,433.77 USD-3.46
Amazon.com Inc2,033.60 USD-2.98
Apple Inc303.15 USD-3.16
Microsoft Corp174.17 USD-2.47

About Author

Vikram Barhat

Vikram Barhat  Vikram Barhat is a Toronto-based financial writer specializing in investing, stock markets, personal finance and other areas of the financial services industry. He also writes for CNBC, BBC, The Globe and Mail, and Toronto Star.