Alphabet Inc (NASDAQ: GOOG) stock dropped two percent on Monday as many investors continue to worry about President-elect Donald Trump’s effect on tech giant stocks, with one popular investor going as far as calling them “a bubble.”
Jeff Gundlach is not keen on Google stock, or any other big tech stock, for that matter. In an interview with CNBC—who described Gundlach as a “legendary fixed income investor”—he was bearish on the future of traditionally lucrative shares. (Source: “Jeff Gundlach says FANG stocks are ‘a bubble,’ buy financials on Trump instead,” CNBC, November 11, 2016.)
“I do think industrials, materials and financials are the sectors. … Financials I like for the obvious reasons, a real simple thesis, I heard it on CNBC over and over again. I agree with it. The yield curve has been steepening, it’s positive for financials. Of course the Trump win, around the edges, means less pressure on regulation of banks,” Gundlach told CNBC.
He went on to advise that investors stay away from popular tech tickers like Google stock in a big way. “I think the FANGs [stocks] are a bubble frankly.”
Gundlach is not alone among the tech stock doomsayers, but others are still bullish on these tickers, especially Google stock. Martin Sosnoff of Forbes, for instance, views Google stock as a good buy.
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“Go back over a decade to Google’s debut as a public company,” wrote Sosnoff, “followed by Facebook and then Alibaba and include Amazon. Internet stocks proved felicitously playable. Alphabet, formerly Google, exhibits a trajectory over 5 years at 200%, albeit it now trades 8% off recent months’ high. From inception, over 10 years ago, we are talking about 20 times around the clock.” (Source: “Alphabet Vs. Amazon: Whose Numbers Sing Sweeter?,” Forbes, November 10, 2016.)
Much like at many other large tech companies, there’s a lot of concern at Alphabet Inc about just what Donald Trump will mean for the tech industry in general, including Google stock.
And to make bad things worse for Alphabet, the company’s drone delivery deal with Starbucks Corporation (NASDAQ:SBUX) fell through last week. (Source: “Alphabet Taps Brakes on Drone Project, Nixing Starbucks Partnership,” Bloomberg, November 8, 2016.)
It hasn’t exactly been Alphabet’s week. But then again, it has been a lot of other people’s week as the shakeup following Trump’s surprise victory continues to ripple across both the market and American politics.