Long-time tech analyst Gene Munster believes big tech is on the cusp of a major shift: It's becoming a stock pickers' market.
The Loup Ventures founder and managing partner expects FAANG stocks, otherwise known as Facebook, Apple, Amazon, Netflix and Google, will fail to collectively rally like they did during most of 2020's record run.
"There's going to be a fracturing of the performance within FAANG," Munster told CNBC's "Trading Nation" on Tuesday. "Think of that group of haves being Apple, Amazon and Google, and the have nots being Netflix and Facebook."
Munster sees the split coming down to adapting to the coronavirus — as well as evolving and thriving in a post-pandemic world.
"The companies that are the haves are ultimately going to be involved in much bigger businesses," said Munster.
He's most bullish on Apple's prospects, and highlights its innovation in the health and wellness space.
"It's very simple. Cash is king, and that will ultimately will be driven even higher with wearables," he said.
Munster speculates newer Apple watches and AirPods will be designed to attract more health-conscious consumers. He also predicts the 5G upgrade cycle will boost the bottom line.
"This company should earn close to $6 [a share] in earnings in just a couple of years," he noted. "Put a 35x multiple on that, and you have a $200 stock."
According to Munster, it's a good time to consider buying shares. Apple shares, which had a 4-1 stock split on Aug. 31, have soared 52% so far this year. But they're off 19% from the all-time high.
He sees Amazon reaping long-term benefits from its logistics investments during the pandemic rush to buy online. In Google's case, it's more of a innovative play independent of the virus.
"Think about what's going on with Verily around health and wellness — also what they're doing with Waymo around autonomous transportation," said Munster. "These types of businesses, I think, are ultimately going to increase Google's multiple in the months ahead."
Among the FAANG stocks, he's most bearish on Facebook and Netflix because he sees little innovation.
"The losers are simply going to be doing the same things in the one [to] two years as they did in the last," he said. "This won't satisfy investors' need for bigger and new addressable markets, and we think the multiples on those stories will start to be weighted down in the months and quarters ahead."
Facebook is off more than 16% from its record high hit on Aug. 26, while Netflix, which saw an early boost from stay-at-home investment strategies, is almost 15% away from its high set on July 13.
"We can't treat all big cap [tech] the same," Munster said.
On Tuesday, the tech-heavy Nasdaq grabbed 185 points or 1.7% to close at 10,963. It's down 9.2% from its Sept. 2 record high, and up more than 59% from its March 23 low.
Munster has no disclosures.