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Despite recent market volatility and concerns about high valuations, technology stocks remain a compelling investment opportunity, according to Michael Bapis, Managing Director and Senior Portfolio Strategist at Vios Advisors, part of Rockefeller Capital Management. In an interview on CNBC's 'Closing Bell,' Bapis argued that the narrative of technology being 'too expensive' is overblown and that investors shouldn't abandon the winning tech companies that have thrived in the first half of the year.

Bapis's perspective comes at a time when many analysts are questioning whether the tech sector's impressive run is sustainable. Rising interest rates, inflation, and regulatory scrutiny have all contributed to a sense of caution. However, Bapis maintains that the underlying fundamentals of many tech companies remain strong. He points to their continued innovation, robust growth prospects, and dominant market positions as key reasons to remain optimistic.

Why Tech Isn't 'Too Expensive'

The core of Bapis's argument is that the current valuations of tech stocks, while high, are justified by their potential for future growth. He believes that the market is overly focused on short-term fluctuations and failing to appreciate the long-term value creation that these companies are capable of. He highlights that many of these companies are still in the early stages of their growth cycles and have significant opportunities to expand into new markets and develop new products and services.

Furthermore, Bapis emphasizes that the definition of 'expensive' is relative. He suggests that investors should consider the potential return on investment (ROI) rather than simply focusing on price-to-earnings (P/E) ratios. Tech companies often reinvest a significant portion of their earnings back into research and development, which can drive future growth and ultimately increase shareholder value. This constant innovation and evolution justifies a higher valuation compared to more mature industries.

Sticking with the Winners

Bapis advises investors to focus on the tech companies that have already demonstrated their ability to deliver strong results. He suggests that these "winners" are likely to continue to outperform the market in the years to come. He’s advocating for a disciplined approach, staying invested in companies with proven track records and strong competitive advantages. Trying to time the market or chase short-term gains can be risky, especially in a volatile environment.

Navigating the Current Environment

While Bapis is bullish on tech, he acknowledges that investors need to be selective. He recommends conducting thorough research and understanding the specific risks associated with each investment. Diversification remains crucial, and investors should avoid putting all their eggs in one basket. He also suggests paying attention to macroeconomic trends and adjusting portfolios accordingly.

In conclusion, Michael Bapis's perspective offers a reassuring message for investors who are concerned about the high valuations of tech stocks. He believes that these companies still have significant growth potential and that sticking with the winners is a prudent investment strategy. However, he cautions against complacency and emphasizes the importance of careful research and diversification.