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The tech sell-off fueled by DeepSeek's new AI model has created quite the buzz on Wall Street ahead of a crucial earnings week.
B. Riley Wealth chief market strategist Art Hogan joins Market Domination to point out that while the tech sector faces pressure, earnings season is signaling positive growth, especially for names outside of tech.
Hogan notes that hedge funds have reduced their positions in Big Tech, reflecting caution. Additionally, Hogan suggests a market-weight stance on AI stocks and recommends looking at undervalued sectors like energy (XLE), which he sees as poised for growth despite recent underperformance.
“Well, we think that this is a great year for things like energy. That's probably our most non-consensus call… Energy is the worst-performing sector in the S&P 500 (^GSPC) for two years running. We think the multiples are ridiculously cheap, most of the majors throw off nice dividends,” Hogan says.
Hogan also recommends considering other undervalued sectors like financials (XLF) and healthcare (XLV): “We think the financials are probably the largest net beneficiary of new policies from a new [Trump] administration."
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This post was written by Josh Lynch