Apple, Microsoft, Google, Amazon and Meta shedded nearly $500 billion in combined market cap during Tuesday's selloff. Despite seeing continued troubles ahead, Loup Ventures' Gene Munster has been adding to positions in Apple Inc (NASDAQ:AAPL) and Meta Platforms Inc (NASDAQ:META).
"I think you have to look at the near term versus the long term," Munster said Wednesday on CNBC's "Squawk Box."
What To Know: Many of the mega-caps tend to fare better during big selloffs, but Tuesday's price action shows that investors are focused on the uncertainty surrounding continued rate hikes.
Related Link: 3 Pros On What 8.3% CPI Inflation Number Means For The Fed: 'A Strategic Error Of Epic Proportions'
"But there are three important numbers that I think outweigh the negative aspect around rates ... 30, six and 10," Munster said.
The top five big tech companies turned in an average growth rate of 30% in 2021. This year, big tech is on pace to post 6% growth, he said. Next year, growth should trend higher toward 10% while estimates come down, he added.
"Despite a belief that I think they are going lower here, if you're going to say put a stake in the ground, where are they going to be six months from now? I think they'll be higher. And if you say 12 months from now, I think these stocks will be measurably higher," Munster said.
Why AAPL & META? Munster told CNBC that his fund is currently 35% in cash, which is down from 50% just a couple of months ago. He doesn't want to own big tech into the third-quarter earnings season, with the exception of Apple and Meta.
Apple is positioned well following the iPhone 14 release, which is already seeing outsized demand based on longer lead times, he said.
"What they are doing around hardware, software, services is something that is going to continue to power earnings higher, so I think Apple is going to be in a great spot," Munster said.
He noted that his fund's smaller cash position is a result of recent buying in Meta.
"We think that Reels is going to get on its feet. We think TikTok eventually is going to get banned, give it two years. It's not going to be around for the long haul," Munster said.
Meta's Facebook is banned in China because the Chinese government doesn't want its people to be influenced, he said.
"I think a similar view is going to take hold in Washington. We are going into a presidential election. There are going to be themes that both sides of the aisle are going to rally around and I think a separation from China theme is going to be a common theme," he said.
Munster noted that he also likes Meta stock because the company can reach 40% of the global internet population and he expects it to make adjustments to its advertising platform following Apple's privacy changes, but the TikTok call is what differentiates Munster from other analysts.
"TikTok is going to be a political punching bag in the next two years and I think Meta is going to be a beneficiary of it," Munster said.
AAPL, META Price Action: At the time of writing Wednesday, Apple was up 1.2% at $155.69, while Meta was down 1.52% at $150.82.
Photo: Solen Feyissa from Flickr.
