Investing

Tech giants may be stronger than you think

Defensive plays in the tech sector
VIDEO2:2902:29
Defensive plays in the tech sector

Technology leaders like Facebook, Alphabet and Apple are down around 6 percent since the start of 2016 on fears over China's financial health. Add to that worry over a slowing American economy, and the picture for the sector doesn't look too great.

But investors might want to hold off on selling the tech dip. Worries from Beijing and the sluggish 2 percent annual growth rate of the U.S. economy won't weigh too heavily on the largest tech companies, experts told CNBC's "Squawk Alley."

"I think there is very good growth in tech," said Allianz Global Investors senior portfolio manager Walter Price. "Technology companies] may moderate in our slower-growth economy, but I think tech has still got good growth, much better growth than most sectors in the economy."

A visitor holds a new Windows Lumia 640 XL smartphone in the Microsoft Corp. pavilion at the Mobile World Congress in Barcelona, Spain, on Monday, March 2, 2015.
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New developments in cloud technology and video advertising on the Internet will be major tail wind factors for the industry, according to Price. "Those trends aren't going away," he said.

A boost to tech companies is expected as many are reporting earnings near the end of January. Netflix is expected to release its results Jan. 19, kicking off the wave of highly anticipated announcements.

With giants like Apple and Microsoft having done so well in 2015 — up 37 and 24 percent, respectively, since the start of 2014 — some investors are skeptical of whether these companies could continue to see success. Others still think the tech sell-off will hurt the sector.

"There are many that are going to get hammered and it will be a big problem for tech stocks — no question about it," said Eric Schiffer, chairman and CEO of Patriarch Private Equity, in an interview with CNBC last week.

Despite the risks, Mark Mahaney, RBC Capital Markets' lead Internet analyst, is bullish on FANG, the acronym for top tech companies Facebook, Amazon, Netflix and Google.

"We're sticking with our fundamental guns. We think that we're going to see consistent revenue trends, demand trends, especially for the leading Internet companies, not for all of them, but those FANG names," Mahaney said.

— CNBC's Christina Medici Scolaro contributed to this story.