There could be more downside ahead for tech stocks, investing expert Evan Newmark warned on Friday.
After hitting a record high at the open, the tech-heavy Nasdaq composite closed 1.8 percent lower on Friday. Shares of Apple, Facebook, Amazon, Netflix and Google-parent Alphabet all fell more than 3 percent.
“These tech stocks … most of them are still up close to 30 percent for the year. This is not a big pullback,” said Newmark, a private investor and CNBC contributor.
“There could be a lot more pullback in the FANG stocks before this is over.”
However, while valuations may be high, he certainly doesn’t believe what’s happening in the tech sector is anything like the internet bubble of 2000.
“These are real companies. They generate excellent cash flow. They are very well run,” Newmark told “Closing Bell.”
“Apple is a well-run company. The valuation is not stupid by traditional parameters. That doesn’t mean that it’s worth $150 a share. It also doesn’t mean that the company’s going to disappear tomorrow like companies did in 2000.”
Meanwhile, other sectors did well, and that could be good news for the overall market, he pointed out.
“It’s very hard, in my view, for the S&P 500 to keep on hitting new highs if it’s increasingly dependent on the tech sector. At some stage you need the financials, you need the energy sector, you need the industrials,” Newmark said. “Maybe you’re having that rotation.”