The earnings nightmare at Netflix Inc (NASDAQ:NFLX) has some investors fearing what's ahead for other FAANG names, but Hightower Advisors' Stephanie Link sees warning signs for another group of stocks.
"I think this actually is a message for any of the stay-at-home winners to be careful," Link said Wednesday on CNBC's "Squawk Box."
Netflix was a stay-at-home beneficiary during the pandemic, as more eyeballs were drawn to screens amid global lockdown measures.
"Now it's coming to roost," Link said. "It's coming back to haunt them."
Netflix on Tuesday reported an unexpected decline in subscribers, which sent the stock down more than 25%.
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So, how can investors who own stay-at-home beneficiaries avoid becoming victims of the newest Netflix horror film? By focusing on valuation, Link said.
She noted that there are some technology names that have TAM (total addressable market) stories that she still likes, including stocks in cybersecurity, AI, data center and 5G.
"There are places to play in technology in all of those themes, but you really do want to focus very much on valuations," Link said.
NFLX Price Action: Netflix shares are making new 52-week lows, according to data from Benzinga Pro.
The stock was down 36.77% at $220.26 at the time of publication.
Photo: yousafbhutta from Pixabay.