Despite the sell-off in technology stocks in the U.S. on Monday — a market event that usually affects sentiment in other parts of the world — a Credit Suisse analyst said on Tuesday that the sector is still a good buy.
"What I like about tech is it's cyclical, defensive, (it has) growth and is highly suited for this late in the bull cycle," Andrew Garthwaite, the bank's head of global equity strategy, said at the Credit Suisse Asian Investment Conference in Hong Kong.
"Technology is the differentiator for this cycle, which means the market has to be led by tech," he added.
Within the tech sector, Garthwaite said he likes cybersecurity, gaming and software companies.
The tech sector held up well in the broad-based sell-off earlier this year, and when bold yields rose, Garthwaite said. Tech companies have healthy cash flow on their balance sheets because they're under-leveraged.
"For all of it, the valuation is not excessive," he said during a presentation at the conference, though he added that U.S. tech stocks are more "overbought" than their global peers.
He added that he is, however, worried about data protection laws that could limit the competitive advantage of tech companies, as well as taxes imposed on digital services.
But advances in tech don't benefit only companies in the sector — it's good news for the stock market in general, because it leads to more productive use of capital and resources, he said.