Investors may be tempted to steer clear of tech stocks after recent steep losses, but that weakness hasn't shaken Deutsche Bank's confidence in the sector.
On July 26, the tech-heavy Nasdaq Composite dropped more than 1 percent as Facebook posted its worst day ever. One day later, the index dropped 1.46 percent, with shares of Intel and Twitter leading declines.
"Following recent weakness in social media and other tech related names, there has been increased rhetoric surrounding the 'demise of Tech' and the suggestion that tech has lost its market leadership position. In short, we believe this rhetoric is premature," Larry Adam, chief investment officer of Deutsche Bank's Wealth Management Americas unit, wrote in an August 3 note.
The German bank acknowledged that 18 percent of the S&P 500 information technology sector and 43 percent of Nasdaq companies are down more than 20 percent from their year-to-date highs. But it also pointed out that the S&P 500 IT sector is still 28 percent higher over the past year, and it's the top performer in the index over that period.