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After a big flight to safety in the first half of the year, investors are buying into tech again – but top tech investor Paul Meeks isn’t so sure. “I feel that way, not because I see the fundamentals of these companies improving much in the near term,” Meeks, a portfolio manager at Independent Solutions Wealth Management, told CNBC Pro Talks on Wednesday. “I think speculative names in the sector won’t come back for a while, so the smart thing to do is to continue to play defensive rather than offensive technology,” he said. One stock that Meeks likes is tech giant IBM. CEO Arvind Krishna has transformed the business since he was hired in April 2020. “Big chunks,” he said, putting IBM on a path to revenue growth. The company posted revenue of $15.54 billion in the second quarter, beating analysts’ consensus estimates of $15.18 billion, according to Refinitiv. It’s actually growing at a pretty reasonable clip,” he said, adding that the company pays an “obnoxious” dividend that would “please even a value investor.” Meeks likes telecom giant AT&T as a “hideout.” It has become a telco, according to Meeks, and is gaining market share over T-Mobile and Verizon. AT&T also has “a lot of raw It generates money, and pays a dividend of 5% to 6%, he added. When to get all in. “All these companies should have less volatility and be a way for investors to play defensive technology until the offensive technology comes back. But when tech comes back, do I want AT&T and IBM to be big? Are there stocks in my portfolio? No, because then it’s a disaster.” Because I want to play,” Meeks said. But he plans to “wait a little bit” to reinvest in tech stocks. “Before I go all in, I feel more confident that analysts have lowered their estimates to reflect the recession. [earnings per share] Forecasts are posted,” he said. Read more Asset manager likes this chip stock so much, he’s putting his own money in Should’ FAANG stocks – and one to avoid, analysts are betting that any recession in the US will be “short and shallow”, or the Federal Reserve will step in and cut interest rates at a faster rate. According to Meeks. “This current narrative or output rate is too optimistic.” Or at least I’m not sold yet,” he added. – Horizon, his “best long-term money-making idea is chip giant Micron – a stock he admits is a contrarian call given the company’s challenging outlook. He says he’s looking past this because he believes in the efficiency of memory chips. The market is a “short-term correction”, which disappears in a few quarters. Pany, which dominates with two other players in an oligopoly around the world,” Meeks said of Micron. He added: “In the next couple of years, all the drivers, like artificial intelligence, will require more and more chips, more and more chip memory, so I think that stock will be particularly good.”
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