Buyers have seemingly shed their urge for food for tech stocks this year amid a flight to basic safety. Tuesday’s sell-off on Wall Avenue noticed the 6 greatest U.S. tech businesses lose more than $500 billion in current market capitalization following a hotter-than-predicted August inflation report sent shares tumbling. Leading tech investor Paul Meeks is advising investors to stay away for now — unless of course 1 is organized to batten down the hatches until the storm subsides. “I assume that tech should proceed to be avoided for the time remaining except a single certainly is a extended-term investor. Now, several individuals say that they are, but they get rattled by quick-phrase losses, so they seriously are not,” Meeks, portfolio supervisor at Impartial Options Prosperity Management, instructed CNBC’s “Road Signs Asia” on Thursday. “Incorporate an stock correction to the existing troubles with semiconductors, and that’s yet another motive to keep absent because the sector likely can’t outperform devoid of a semiconductors restoration.” Against this backdrop, Meeks is opting to remain defensive in the sector, preferring safer bets with “abnormally significant funds degrees.” Here’s what he has to say about two of the tech giants: Apple and Samsung. Exposure to semiconductors In the small expression, Meeks prefers Apple for its relative protection. “The most troubled portion of the tech sector around the world suitable now is semiconductors. They are struggling from all forms of problems. Very first, the knock-on outcomes of the Covid-19 pandemic, but it has gotten even worse lately for the reason that there is now a semiconductor stock correction all around the globe,” he explained. He believes Samsung will be “terribly impacted,” as it derives approximately third of its revenues from its memory chip business enterprise. The South Korean electronics huge observed an 18% growth in its semiconductor phase in the second quarter of the year, a performance that Meeks hailed as “heroic in a downturn.” But he said buyers really should be expecting the section to “present some destruction” in the third quarter, with the stock correction owning appear “speedy and furious” soon after Samsung reported its earnings. Meeks therefore thinks Apple is a safer guess in the shorter phrase as it does not have as a great deal exposure to the beleaguered semiconductor sector. “The semiconductor small business is a really superior company, but it truly is incredibly cyclical. Whilst Apple does a great deal of points well, but they’re not in the semiconductor business,” he stated. Samsung a very long-expression wager? More than the for a longer period expression, however, Meeks thinks Samsung is the far better bet. “Above the lengthier time period, once you get earlier the quick and intermediate expression pitfalls, I would possibly want Samsung. While they are both equally great providers, Samsung is a hell of a whole lot more affordable,” he claimed. “What I see is that a year or so from now, you would want to be in Samsung. Less expensive valuation, even larger upside and you will be poised for a great snapback in semiconductors. I am just concerned about that subsequent few of quarters involving here and then,” he extra. Shares in Apple are down 12.2% this calendar year, though they have beated the tech-weighty Nasdaq Composite , which has drop just about 25% of its marketplace price in the identical interval. The firm is invest in-rated by 78% of analysts covering it, who give it an regular potential upside of 17.5%, in accordance to FactSet info. Samsung has shed practically a third of its marketplace cap in this year’s tech rout but is get-rated by a whopping 94% of analysts covering the stock. FactSet data exhibits the inventory has an regular opportunity upside of 43.1%.