Morningstar’s director of US market strategy David Sekera believes the big sell-off in Big Tech this year may be overdue. The broader tech sector has borne the brunt of the market’s rotation away from growth stocks and has been in the big names this year, as currency tightening becomes increasingly apparent. The Nasdaq Composite is down 28% so far, sending the tech-heavy index into bear market territory. FAANG stock is also trading at a deep discount, Sekera told CNBC Pro Talks on Wednesday. Specifically, one FAANG stock – Meta – has become so cheap that investors can buy it with a large “margin of safety,” he said. Determining the “margin of safety” is a classic value investing strategy – and one of Warren Buffett’s foundational principles – of looking for stocks with a much higher intrinsic value than the market valuation. their school. Value-focused investors like Buffett believe it’s a key factor to consider when assessing a company’s risk and return potential, especially during times of market volatility. And it has led Sekera to argue that now might be the time to look back at FAANG stock. ‘Safety’ stock Sekera noted that both Alphabet and Facebook’s parent Meta are trading at a “deep discount” from their long-term valuations. He estimates that Alphabet is trading at a 35% discount to Morningstar’s fair value on the stock, while Meta is trading at less than half its fair value. Shares of Alphabet are down more than 20% this year and trade at a P/E ratio of 18.3x. Meanwhile, more than half of Meta’s market capitalization has been wiped out this year, and the stock is currently trading for a price-to-earnings ratio of just 12.6 times – the lowest of its peers. industry, according to FactSet data. About 80% of analysts rate this stock as a buy. “It’s always been hard to know exactly when the market will catch up again to where we think intrinsic valuation is… But at this point, you know, we think you can buy the stock. that stock with such a large margin of safety – investors will be fine Sekera says of Meta, he said the company will benefit from long-term structural growth in the digital advertising sector – despite some negative publicity this year.Meta said in February that Apple’s App Tracking Transparency feature reduces targeting by restricting advertisers’ access to human identifiers. using the iPhone, would help the social media company’s revenue this year by about $10 billion, but Meta has since ramped up its efforts to deal with those difficulties, turning to generating more revenue from Instagram Reels and invest in artificial intelligence to drive content recommendations the way its competitor – ByteDance-owned TikTok – does.