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Should Investors Shift Away From 'Old Tech' Legacy Stocks Into Cloud-Based Platforms?

Should Investors Shift Away From 'Old Tech' Legacy Stocks Into Cloud-Based Platforms?

Janus Global Technology Fund Portfolio Manager Brad Slingerlend explained why his fund allocated investment dollars out of "old tech" legacy names.

Speaking as a guest on CNBC's "Squawk Alley," Slingerlend said any volatility and disruptions to the macro-economic environment hasn't had any impact on the longer-term trend of companies shifting resources towards cloud-based storage.

"We are seeing significant budgets move away from legacy IT vendors, companies such as Oracle Corporation (NYSE: ORCL), EMC Corporation (NYSE: EMC), HP Inc (NYSE: HPQ) and into cloud stocks."

The fund manager added that cloud stocks that are seeing a benefit include Workday Inc (NYSE: WDAY), ServiceNow Inc (NYSE: NOW), NetSuite Inc (NYSE: N) and, inc. (NYSE: CRM).

Related Link: Argus Reiterates Buy On Salesforce Following Strong Earnings

He continued that an exception to the "old tech" legacy names includes Apple Inc. (NASDAQ: AAPL), and the fund is still long the name although it is being held with a "cautious view" despite the "strength" of the company's installed base of its iPhone users.

Alphabet Versus Facebook

Slingerlend also acknowledged that his fund has a larger position in Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) than Facebook Inc (NASDAQ: FB). He explained that Alphabet has "a lot more optionality" around its core business, especially in the area of artificial intelligence, machine learning, YouTube and mobile.

He added that Facebook's "fastest growth days" are "probably behind them," although it will continue to "significantly" grow in the future.


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