Tech stock selloff's 'a little bit of a relief': Strategist - Yahoo Finance

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Apple (APPL) shares close lower for their second-straight day, losing a reported $200 billion in market value. This can be attributed to the Chinese government's plan to ban state employees and agencies from using iPhones for work.

Corient Wealth Management Partner Amy Kong deems that China's actions are primarily aimed at tightening nation security measures rather than forcing foreign business out of it's market.

Kong notes the tech sell-offs that China's actions could trigger, characterizing them as a healthy response to uncertainty and tech sector trends.

Video Transcript

SEANA SMITH: $200 billion is said to be wiped off the value of the tech giant at the close of today. Now, lower for a second day, this time on reports that China is planning to expand its ban on iPhones to government-backed agencies and state companies. Now, the move lower in Apple is having a widespread effect on the markets, a number of the larger tech giants falling today as well.

We wanna bring in Amy Kong, partner at Corient Wealth Management. Amy, it's good to see you. So certainly some concern here amongst investors about what exactly this could mean for Apple. But this move lower once again today. Do you think the concern here justifies this massive drop that we've seen in the stock?

AMY KONG: Hi, ladies. Nice seeing you both again. I'm certain that the headlines is concerning. We're watching it very closely ourselves. But I think the shortfall that we're seeing today and in recent days is justifiable. What we're seeing from the China headline seems to be from our standpoint just a question on national security at the moment and not necessarily a ban of foreign companies doing business in China.

Obviously, we're watching that very carefully because the risk of such a headline could be a potential signal that Chinese citizens should be using more domestic technology as opposed to foreign technology. But we're not quite there yet. We're still holding on to the stock.

We do think that it is a reciprocation of some of the laws that we've seen in the US, banning TikTok or using Huawei technologies as an example. And so again, from our standpoint, it seems to be more, again, national security at the moment, we're not yet throwing in the towel on Apple. We do think, though, that this is worth watching as China is about 18% of Apple's revenue.

AKIKO FUJITA: So, Amy, if it is just about national security, it's largely contained, what do you make of the move on Apple and then kind of the ripple effect that we have seen in tech overall today?

AMY KONG: Yeah, it's a great question, Akiko. And I actually think that it is, from our standpoint, a little bit of a relief to see some of the tech companies sell off a little bit. One of the things that we've been more concerned about going into this rally we've seen all year is the valuation levels of not just the FANG stocks but, again, some of the semiconductor companies, NVIDIA, et cetera, that obviously have been benefiting from AI euphoria and just a tech rebound in general.

And so the fact that they've been selling off a little bit to us, it's very normal. And we actually are somewhat relieved that the valuation story is, quote unquote, not as frothy as from some weeks before.

SEANA SMITH: So, Amy, are you seeing investment opportunities here within tech? And I guess, where are you-- I know you're saying-- you're advising investors to hold Apple. But where else are you seeing a reason to buy at these levels?

AMY KONG: We're actually not quite recommending investors to put dollars back into tech just yet. We've had a full position going into this rally. And so what we've been advising is really to stay put. While we have seen some of the froth removed from this sector, we're not quite at the point where we're saying that the market is attractive enough from a price-to-earnings perspective as an example to, again, add more dollars to the market. So we're holding steady at the moment.

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