As Amazon and Google parent Alphabet hit record highs, not everyone sees a case for flocking into high-flying tech stocks.
Brian Kelly, founder of Brian Kelly Capital and trader on CNBC's "Fast Money," says investors aren't making the most of their money when they buy mega-tech stocks. While Amazon has soared since February and Alphabet has seemingly recovered from two questionable quarters, Kelly believes that sector rotation in the market could actually take out the benefits both these stocks would offer.
"Over the last 12 to 18 months, [you have seen] sector rotation," he said Thursday on CNBC's "Power Lunch." "So to me, I'm looking more towards the energy sector and the financials at this point in time."
"Those [sectors] to me seem like they've been the laggard," he added. "They look like they're starting to break out, and they actually have some dividends to them as well."
Financials has been the worst-performing sector on the S&P 500 this year, but recent earnings surprises from some of the big-name banks have given a glimmer of hope to an otherwise underperforming sector. Energy, meanwhile, has looked to be on a slump as oil prices dropped and many energy companies failed to beat earnings estimates.
Meanwhile, Erin Gibbs, equity chief investment officer at S&P Global, sees positive signs for both stocks.
"They're both trading at about 15 percent below analyst target prices, so clearly the Street still thinks there's a lot of potential upside," she said. "Both of them have really impressive growth [with] Amazon looking at about 60 percent long-term growth and Alphabet about 17 percent [long-term growth]."
However, Gibbs does believe that between the two, Alphabet has more potential. While Amazon continues to crush the online retail market with seemingly almost no competition, Alphabet looks to be headed to the upside based on market factors Gibbs sees.
"Right now, out of the two I'd really go with Google over Amazon just more from a valuation [standpoint]," she said. "[Alphabet is] trading at a little more of an attractive valuation, and they're trading a little lower from the target prices than they typically are."
"I just feel like there's a safer bet on the upside with Google versus Amazon," she added.
Over the past month, Amazon is up 2 percent while Alphabet has surged 11 percent; both stocks hit all-time highs on Thursday.
