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- Steven DeSanctis of Jefferies told CNBC on Tuesday that many large technology stocks are getting "pricey" and investors should look for alternatives in other sectors.
- "At nine times revenue, 10 times revenue, it gets a little pricey, and with that any bad news will actually be a huge detriment to these stocks," the equity strategist said, referring to technology stocks.
- He recommends investors buy stocks in industrials, consumer discretionary, and materials sectors as alternatives to technology.
Steven DeSanctis, Jefferies equity strategist, told CNBC on Tuesday that many large technology stocks are getting "pricey" and there are cheaper alternatives that investors can buy now.
"At some point you have to say what is too high," DeSanctis said, referring to tech stock valuations. "At nine times revenue, 10 times revenue, it gets a little pricey, and with that any bad news will actually be a huge detriment to these stocks."
While he said he believes technology companies are fundamentally strong, sectors outside of technology are cheaper alternatives.
"Our argument is that things outside of tech are actually getting better," the strategist said.
DeSanctis told investors to look for stocks in industrials, consumer discretionary, and materials sectors. These are set to improve in revenue growth and will gain as the economic backdrop improves in 2021. They also may deliver better earnings growth than large-capitalization technology stocks, he said.
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September 30, 2020 at 09:21AM
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