Billionaire 'bond king' Bill Gross tells investors to avoid tech and stick to value stocks
Janus
- Billionaire "bond king" Bill Gross told investors to avoid tech stocks and stick to value stocks.
- Microsoft is the only buy if investors must dabble in the tech sector, he said.
- Gross also questioned the rationale for owning bonds. Yields spiked Thursday after the GDP report.
Bill Gross says investors should avoid tech stocks.
In a post on X, the "bond king" said, "Stick to value stocks, avoid tech for now."
His message comes as a weaker-than-expected GDP report also showed that consumer prices remained high in the first quarter. Bond yields jumped on the data, and the tech sector dropped, with the Nasdaq Composite down more than 1% Thursday afternoon.
Gross said that if investors have to dabble in tech, go with Microsoft: "MSFT best in tech if you must."
Expectations for the tech titan's earnings after the bell on Thursday are high as Wall Street eyes momentum in its Azure, Copilot, and office 365 units.
Gross also questioned owning bonds, with the 10-year above 4.7% on Thursday after the GDP report.
The billionaire investor said he owns stock in Western Midstream Partners and energy infrastructure firm MPLX.
Bill Gross has been cool on the AI craze that's gripped Wall Street. He previously told investors that the AI frenzy is showing signs of "excessive exuberance."
The stock market has had its worst month of the year in April. Another hot inflation print in March has prompted a reappraisal of the Federal Reserve's path of monetary policy, with Wall Street dialing down expectations for rate cuts.
Tech earnings haven't been enough to kickstart a new rally. Tesla reported dismal results but the stock rose on plans for a cheaper vehicle model in the works.
Meta, however, disappointed investors with weak guidance in its earnings report on Wednesday. The stock sold off sharply, down by over 10% late Thursday, helping to drag the tech sector lower.