Volatility is spooking tech investors, but Eaton Vance's Yana Barton says the secular trends powering technology's rise haven't changed overnight.
"I recognize that volatility is uncomfortable, but it is par for the course in higher growth and higher beta areas of the market, because they've done so well," Barton, portfolio manager and vice president at Eaton Vance Management, said on CNBC's "Power Lunch."
Technology stocks regained ground lost earlier in premarket trading Thursday, after getting clobbered by the worst day in over seven years on Wednesday. The Technology Select SPDR Fund, which tracks the S&P 500 technology sector, was up 1.2 percent in trading, recovering after being down as much as 1.4 percent in premarket. The SPDR Fund is down about 4.6 percent this week. The S&P 500 Information Technology Index fell 4.8 percent on Wednesday, closing at $1,220.62, marking the biggest decline since Aug. 18, 2011, when it dropped 5.3 percent.
Early on Thursday morning, top tech analyst turned venture capitalist Gene Munster warned that tech giants, including Netflix, Amazon and Facebook, could see another big "step down" of 5 percent.
"Brace yourself" for more selling in technology stocks, he said on CNBC's "Squawk Box."
But Barton said the "tech wreck" is overblown and underlying growth trends haven't really changed.
"Ubiquitous computing and long-term secular trends of connected devices, autonomous driving — none of those things have changed overnight. We still believe in the secular growth stories, and many of them reside within the tech space, and some of them reside within the new communications services space," Barton said.
The unlikeliest of the FAANG stocks — Facebook, Amazon, Apple, Netflix and Google — even got an upgrade from CFRA yesterday, after a session of volatility. Scott Kessler, CFRA analyst and director of equity research, said the firm decided to upgrade Facebook to "buy" from "hold," because there is still growth potential there.
"We really think a lot of the bad news is in the stock," Kessler said. "We have a lot more growth, there is a big balance sheet."
And while Kessler says there is still upside to Facebook's stock, the key to CFRA's thesis is that Facebook isn't actually a growth stock anymore.
"When you look at Facebook, the questions really aren't around valuation at this point. It's really more around the fundamental story, how bad is revenue deceleration and revenue compression going to be?" Kessler said. "You have a lot of people leaning, we think, in the wrong direction ahead of earnings, and that's why we went positive."
Rising interest rates have put pressure on equities, leading experts to speculate that rising interest rates may have created a tipping point for stocks, where the decade-long investment theme favoring growth over value is changing.
But Barton said it is important to remember that rising rates have long been a concern, and it's really earnings that will indicate pricing going forward.
Secular trends "are not going to end with us talking about rising rates. We've been talking about rising rates for months, if not years," she said.
"We are looking at earnings; earnings ultimately are the leading indicator to price, and that is what we will be watching as earnings continue to unfold," Barton added.
