Tech Stocks Aren't A Buy Right Now But One Giant Is An Exception, Says Analyst

Veteran wall street tech analyst Brent Thill has cautioned against buying stocks in the underperforming tech sector, with the exception of social media giant Facebook Inc. FB.

What Happened: The Jefferies analyst said on Yahoo Finance Live that tech is “off limits right now” as investors put more money into travel and airline stocks amid hopes of a strong economic recovery from the pandemic.

According to the analyst, valuation combined with the tech names could currently be frustrating a lot of investors.

Thill said that compared to other companies in the tech sector, Facebook is a “cheap name.”

“$15 of earnings power and a mid 20 [P/E] multiple on it, and you are at $350 to $375 on the stock. So you got a lot of upside still on Facebook. We like that,” the analyst added.

See Also: After Months Of Bitter Fighting, Zuckerberg Now Sees Facebook Benefiting From Apple's Privacy Rule Changes

Why It Matters: On Thursday, the tech-heavy Nasdaq Composite Index showed a substantial recovery to end the day higher by 15.79 points or 0.1 percent at 12977.68, after tumbling 1.4 percent. The NYSE FAANG+ Index closed 2.3% lower.

FAANG constitutes the stocks of Facebook Inc, Amazon.com Inc. AMZN, Apple Inc. AAPL, Netflix Inc. NFLX and Google parent Alphabet Inc. GOOGL GOOG.

Facebook’s shares are up just more than 1% for the year-to-date period. Tech stocks that have underperformed so far this year include Adobe Inc. ADBE, Salesforce.com Inc. CRM and DocuSign Inc. DOCU. Adobe’s shares are down almost 10% for the year-to-date period, while salesforce.com’s shares are down almost 8% and DocuSign’s shares are also down almost 10%.

Price Action: Facebook shares closed 1.2% lower on Thursday at $278.74.

Read Next: Apple Acquired The Highest Number Of AI Startups In Last 5 Years