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Pricey tech shares have left investors questioning the attractiveness of the sector.
However, the sector still offers some under-the-surface investment opportunities.
Morgan Stanley shared 3 hardware names that could provide more than 30% upside.
Following last year s rally, tech-stock investors are now taking a second look at the sector as higher prices and the appeal of cheaper names challenge the attractiveness of their bets.
However, in a March 1 note, Morgan Stanley highlighted investment opportunities within what many view as an overly crowded technology sector, as it houses the tech hardware industry which tends to benefit from improving macroeconomic conditions.
According to Luke Lloyd, an investment strategist at Strategic Wealth Partners, such a pullback is a healthy thing near all-time highs, and investors shouldn t sweat it.
At the end of the day, tech stocks are still a good investment, he said, and they can justify the high valuations that have led some to cry of a bubble. Especially consider valuations of some stocks tied to an economic reopening, like airlines and cruise lines. A lot of these [reopening] stocks from a valuation standpoint are higher than they were the day before the pandemic. The thing is, they re not making any money, Lloyd told Insider last week. The cruise lines, for example, aren t even offering any cruises. Air traffic isn t getting anywhere close to where it was before the pandemic.