Tech sell-off is mostly a 'healthy correction,' strategist says

PNC Asset Management Group chief investment strategist, Yung-Yu Ma, joins Opening Bid with Yahoo Finance Senior Reporter Allie Canal to discuss the current market (^DJI, ^GSPC, ^IXIC) action and tech sell-off.

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Video Transcript

00:00 Speaker A

This week in tech has been pretty brutal. What do you make of the latest selloff? Is this a healthy correction or maybe a sign of something a little bit more sinister?

00:13 Speaker B

Thanks, it's great to be here. We do see this primarily as a healthy correction. There's certainly have been some areas of the market that had gotten extended, uh, perhaps some uh valuations being more than could be supported by current growth estimates. So we see this as a healthy correction. We do think the market will find a bottom without spiraling downward here. Uh but right now the market is is under some pressure and this will probably continue in the short term.

00:46 Speaker A

Are you encouraging clients to buy the dips at this point?

00:51 Speaker B

Well, I think it pays to be patient. It depends how exposed clients are. We do think clients should be uh exposed and have a healthy exposure to the AI themes, the technology that is going to be the growth driver of the future. Uh we don't think that trend is going away. We still think it's in in the early innings and there's a lot more to go. Uh but that said, you know, over the course of days or weeks, you can get a lot of back and forth in the market. So I think it pays to be patient here, but also to look for opportunities.

01:25 Speaker A

So, how do you play that then? If if if CAPEX generation and really the returns and the ROI that we're going to see from AI is still years away. How do you stay invested in this space uh while not falling behind in other areas or pockets of the market that maybe are undervalued.

01:52 Speaker B

Yeah, well, one, we don't think it's years away. We think some areas are seeing earlier gains and some areas are are probably going to take a bit longer. Uh but we we do think that those benefits of productivity is going to be real. It's going to benefit the economy, going to benefit companies and going to benefit uh consumers and individuals as well. So, I think as a starting point, uh it's important to look at which companies are actually starting to see the earlier gains, where are margins expanding. Uh nothing in the market is really cheap now. I think that's the challenge that we have. It's hard to point to a sector or an area and say this is a safe haven because there's so much disruption in the economy, uh so many shifts going on, changes happening very fast. and when you have a a highly valued market and you have those changes taking place, there aren't necessarily areas to hide out. I think the reality is you still want to lean into the primary growth trends uh and that is AI and technology.

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