Aswath Damodaran, NYU professor at the Stern School of Business and an expert on corporate valuation, believes a common mistake by investors is to think of technology as one group.
"There was a time when you said tech, [and] you really meant high growth, high risk, high P/E. I don't think that's true anymore," said Damodaran. "If you look at the tech sector, it's now 20 percent of the market, and if you break it down by age, the old technology companies are behaving very differently than the young technology companies."
The valuation expert thinks investors can go even one step further and break down the sector into old, middle-age and young tech because of their wide-ranging fundamentals.
In this exclusive interview with CNBC, Damodaran reveals his investment approach to valuing stocks, along with his favorite technology picks. He also shares his views on Amazon valuations, the one company that should consider buying Twitter and at what price, and much more.