Pivotal Analyst Talks Facebook, Alphabet

Pivotal analyst Brian Wieser recently appeared on CNBC and gave his opinion regarding technology stocks, in particular highlighting Alphabet Inc GOOG and Facebook Inc FB.

Both Facebook and Alphabet released Q4 earnings that beat analysts expectations. However, regarding the strength of the technology sector, Wieser said, "Investors don't have a lot of confidence...there may be a lack of appreciation in some cases that future growth has in some way become volatile... I don't think that is the case, especially with Google and Facebook."

Wieser went on to say that while there is a continued risk of a global recession, the degree of the reversal of some of the big technology names in recent weeks has been overdone. Speaking specifically about Alphabet and Facebook, Wieser sees strength due to market leading positions in both search and social media respectively.

"The two companies take virtually all of the growth in the industry...both companies are in a co-dominant position with regards to internet advertising."

However, Wieser did caution investors that Alphabet's capital expenditures will continue to grow which may put pressure on the company's margins and stock valuation in the near term. He noted that supporting services such as YouTube isn't cheap and that the current share price largely reflects future growth opportunities.