Keep Calm And Carry On? Tech Sell-Off Is A 'Healthy Correction'

Technology stocks notably sold off on Friday and showed few if any signs of reversing trends on Monday. This doesn't mean it's time for investors to worry as the sell-off is merely a "healthy correction," at least according to Hood River Capital Management's Brian Smoluch.

Needless to say, technology stocks have been strong since last year and the current sell-off shouldn't have much downside given the strong fundamental backdrop, Smoluch explained during CNBC's "Power Lunch" segment. In fact, the sell-off has created some compelling buying opportunities in the small-cap space.

As a whole, small-cap stocks were trading at a valuation level that represents a premium to historic averages but are now a lot closer to their median levels. In fact, there are a handful of small-cap stocks that are now trading below their median levels, such as Nanometrics Incorporated NANO, a provider of 3D measuring systems.

Nanometrics reported in its first quarter gross margins that fell below expectations, but this was due to "exceptional" demand which required the expedition of many orders. The gross margin issue is expected to be a one-time item that will be fixed in the second quarter and 2018 is expected to be a year of strong demand, especially from China.

Related Link:

Intel's Focus On Memory Will Benefit These 5 Semi Equipment Names

Why Bank Of America Says You Should Stay Bullish On Semi Stocks