Ditch surging Big Tech stocks and pivot to value instead, The Wealth Alliance CEO says

• It's time to ditch mega-cap tech stocks, according to the CEO of the Wealth Alliance.
• "Chasing anything rising at those type of growth rates is a problem," Robert Conzo said.
• Investors should load up on value stocks instead, he added.

Equity investors should turn away from the mega-cap Big Tech giants that have started the year on such a tear - and diversify their portfolios toward value stocks instead, according to one CEO.

A small handful of stocks - including Nvidia, Meta Platforms, and Tesla - have been responsible for nearly all benchmark indices' gains in 2023, with the S&P 500 up 13% and the Nasdaq Composite jumping 27% year-to-date.

But investors shouldn't keep expecting those sorts of returns from Big Tech, The Wealth Alliance boss Robert Conzo said Tuesday.

"Forget the FAANG stocks or MAG 7 stocks - The Magnificent Seven," he told Reuters, referring to Nvidia, Meta, Tesla, Apple, Amazon, Microsoft, and Google parent Alphabet.

"Chasing anything rising at those type of growth rates is a problem," Conzo added. "So where do you put money to work? You put money to work where it's not doing all that well - like value."

Several strategists have expressed a similar viewpoint to Conzo on Tesla's stock, which has been surging non-stop for months, with banks including Goldman Sachs and Morgan Stanley calling for investors to start selling some of their shares in order to take profits from the rally.

It's "time to again, rebalance," Conzo said. "Take some profits off the table on growth - get it to value."

Value investors seek out stocks that they believe are underpriced, whereas growth investors look to snap up shares from companies in rapidly-expanding sectors like tech.

The first of those trading strategies beat the market in 2022, with tech and other growth stocks plummeting as the Federal Reserve ramped up its interest-rate hiking campaign.

But growth names have roared back this year, a combination of the expectation that the Fed will soon slash interest rates and a massive surge of interest in ChatGPT and artificial intelligence tech.