High interest rates are usually bad for tech stocks, and they're now a key macroeconomic risk for "expensive" ones in particular — but two parts of the sector are in a good position, according to Bernstein. The firm's analysts like the semiconductor and Chinese internet areas, even though tech valuations in Asia are more sensitive to bond yields than they have been in the last 10 years, they said in an Oct. 27 note.
"Given the maturity of online penetration in key verticals, and user and time spent growth has slowed, we've increasingly recommended stocks where other variables have driven the medium-term growth outlook," the analysts wrote. They added that they prefer video games to e-commerce. As for semiconductors, Bernstein said it likes TSMC , as it benefits from both secular and cyclical tailwinds.