Technology stocks have been getting hammered, and a lot of analysts think they've been beaten down to the point of being bargains. Ryan Jacob is one of those analysts, and his four-star Jacob Internet Fund is up an average of 24.5 percent per year over the last five years.
So where to make a move in the tech sector? Jacob's unexpected top pick is Shutterfly, a company that's been hit even harder this year than the Nasdaq Composite.
"The online photo-sharing market is booming right now," he told CNBC. "Shutterfly is a leader, and now you're getting a company trading at around seven or eight times cash flow, and growing at a very impressive rate."
Jacob also likes Sigma Designs, a company he sees addressing two fast-growing markets.
"One is the IPTV set-top box market for telcos," he explained. "Verizon and AT&T are rolling out new service very aggressively, will this year and next -- Sigma Designs is a big part of that -- and the other market they address is the Blu-Ray DVD market. Now that we've moved to Blu-Ray as a standard, we expect shipment volumes to go up significantly in 2008."
Jacob owns both Shutterfly and Sigma Designs through his fund.