Naughty Flicks

Skip NavigationMarketsBusinessInvestingTechPolitics & PolicyVideoWatchlistInvesting ClubPROLivestreamMenuTech stocks are suffering right now, as Nvidia tumbles once again after CEO Jensen Huang resigned following reports of multiple extramarital affairs, including one with an alleged Chinese spy. Tom Lee sees an opportunity. “We are sticking with the thesis that Technology stocks bottomed last week,” the head of research at Fundstrat said in a note Thursday. Huang’s departure “does not change our view.” Tech has been battered of late amid concerns over the sustainability of the artificial intelligence expansion as borrowing costs rise. On top of that, an incoming Democratic-controlled Congress is expected to bring more scrutiny to the AI buildout in the country. Tack on the Huang scandal, and investors are left with a Nasdaq-100 index that’s 9.5% below an intraday record set in October. It’s also down more than 7% over the past month. .NDX 1M mountain NDX 1-month chart However, Lee thinks selling pressure will subside following a steep sell-off last week. “The carnage and collapse of several high-profile hedge funds last week is evidence an ‘internal bottom’ was established last week,” he said. “What is an internal bottom? That means a tsunami of selling and forced liquidations took place. To me, the drop last week was a ‘black swan’ of sorts, given that hedge funds tend to be ‘beta neutral’ and therefore should not see sharp declines if Technology stocks fall.” “More importantly, history shows markets bottom on bad news. That means, we don’t want to see stocks fall and then there is a ‘piece of good news,’” he added. To be sure, a big bounce seems unlikely on Thursday. Nvidia shares were down 10%, while the major U.S. stock benchmarks pulled back. Nvidia rivals AMD and Broadcom were a bright spot, up 2% and 5%, respectively. But, if Lee is right and there’s a bottom in tech, now may be the time to add exposure to the sector.Read More