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Is this the end for FANG?

Amazon, Alphabet, Facebook and Netflix — the so-called FANG stocks — were once lumped in portfolios, paragons of the technology world. But lately they've diverged.

With Netflix and Amazon both down more than 20 percent so far this year, does the magical union still hold true for investors?

While optimists see the current dip as a buying opportunity, Wall Street pessimists say these companies might have flown too close to the sun.

Take Amazon, for example. Although the e-commerce giant couldn't handle demand for "fulfilled by Amazon" products during the holidays, it could eventually scale to meet the demand from new Amazon Prime customers, said Jason Helfstein, Internet analyst at Oppenheimer & Co.

"We think that there was a tipping point with Prime," Helfstein told CNBC's "Power Lunch" on Wednesday. "If you're a seller, you need to get to those households."

But David Katz, president and chief investment officer of Matrix Asset Advisors, thinks it's just not possible for a $200 billion or $300 billion company to go up 100 percent per year.

"We think they are wonderful companies," Katz said Wednesday on "Power Lunch." "But we're wary of their valuation. Our history in the market has taught us when you're paying north of 50 times earnings, there's very little room for error. You can get hurt."

At current multiples, Katz said he prefers technology companies like Microsoft, Qualcomm and Apple.

"We think there are some great opportunities in the technology area, and other areas of the market, that you can buy at 12 times earnings," Katz said.

Disclosure: Oppenheimer & Co. makes a market in these securities and expects to receive compensation for investment banking services in the next three months. Katz and his firm both own shares of either: Microsoft, Qualcomm or Apple.

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