Niles: Tech's got a big problem

Dan Niles: These tech stocks could see trouble

The strong U.S. dollar has wreaked havoc on commodities like gold and oil. Now, it could have a new victim: tech, says one top investor.

"It should be a big concern for everybody," Alpha One Capital Partners' Dan Niles warned on CNBC's "Options Action" on Friday.

For many of the largest tech companies in the U.S., international sales represent the bulk of revenues. For example, more than 82 percent of Intel's sales come from outside the United States, according to data compiled by FactSet. Both IBM and Hewlett-Packard get two-thirds of their revenues from overseas.

So far, tech investors have ignored the dollar's potential negative impact. Over the past 52 weeks, the Nasdaq has rallied almost 20 percent while the broader has logged a 12 percent return. However, since the start of the year, the U.S. dollar index, which measures the strength of the buck against a basket of other major currencies, has gone parabolic, rising over 10 percent. And that move has already hit the bottom line of some large-cap companies.

"Hewlett-Packard brought up on their call how they had their Japanese competitors now able to take advantage of pricing," said Niles. "Intel, in their press release, even mentioned currency."

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According to Niles, large companies can usually hedge against the short-term negative impact of currency moves. But Niles says hedging becomes pragmatic if short-term moves in a currency become long-term trends, something dollar watchers say could be happening.

"The bigger problem which people haven't really dealt with is that if the dollar stays up here, these companies are going to have to reprice their products," said Niles. He added that if the dollar continues to rally, U.S. companies selling products abroad will have to slash prices to remain competitive, and that could pressure margins going forward.

"The bigger issue is when you have to go through and reprice your products," Niles continued. "With the dollar up 26 percent up year-over-year today, then all of your products get a 26 percent price increase and that's a big issue if you're an international competitor."

What's most concerning to Niles is the fact that the dollar may not change course anytime soon.

"If the Fed starts to raise rates, there'll be more upward pressure on the dollar," he said.