There's still an opportunity in certain technology stocks — even with the sector's high valuations — but only if investors wait for a "significant dip," one chief investment officer has told CNBC. Private bank Kleinwort Hambros' CIO Fahad Kamal named his favorite Big Tech stocks to buy when the price is right, despite the shift in focus to so-called "value" stocks. Value stocks are viewed as undervalued by investors and are expected to benefit from the economic recovery after the pandemic. Growth stocks, on the other hand, include the major tech stocks and are considered to be companies with revenues and earnings that are expected to grow at a faster rate than the rest of the market. However, they can prove riskier and more volatile . The technology-focused U.S. Nasdaq index hit fresh highs this year, but has still seen some sharp dips since the beginning of 2021. Last week, the Nasdaq fell close to 2%. Speaking to "Squawk Box Europe" Friday, Kamal highlighted a key group of technology stocks that he said would be best to buy in a market dip. He said the "big five" — Facebook , Apple , Amazon , Netflix and Google , also known as the FAANGs — remained "incredible companies." He highlighted that they had each reported strong earnings in the first quarter of 2021, despite coming from "record positions." For example, social media giant Facebook reported that its net income grew 94% to $9.5 billion in the first quarter, while Apple posted its best-ever quarterly revenue of $111.4 billion in the first three months of fiscal 2021. "I mean it's incredible, these remain incredible companies, they are going to be setting the tone for markets for the foreseeable future, there's no doubt about that," Kamal said. He acknowledged that they still looked expensive when compared to other stocks, but encouraged investors to look for an entry point in a "significant dip" to buy into these companies. Price-to-earnings is one gauge as to how expensive a stock is. Amazon has a ratio of 66 and Netflix has a ratio of 62, while the average across the Dow is just under 22. Not everyone is convinced, however. Adam Parker, founder of Trivariate Research, warned that some big tech stocks are high risk and should be treated with caution. Apple made Trivariate's list of riskiest stocks; the research firm said it had the most negative correlation to inflation. Kleinwort Hambros has had a "long-standing overweight" position on "growth" stocks for the last five or six years, Kamal said, particularly technology firms. More recently, he said his firm had lowered its exposure to a more "neutral" position on the sector and invested more in "pro-cyclical regions." These are investments that are expected to rise and fall with the economic cycle. However, Kamal stressed that this didn't mean his firm had sold out of their investments in the technology space but had " re-positioned slightly because we think that there is catch-up for the value trade still."
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There's still an opportunity in certain technology stocks — even with the sector's high valuations — but only if investors wait for a "significant dip," one chief investment officer has told CNBC.