Tech, meme stocks are out of control again and risk 20% drop: Mike Wilson

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The speculative rally in tech and meme stocks is out of control again and some could plummet 20%, Morgan Stanley's chief equities strategist says

"Those have just gotten out of control again, particularly within the context of higher rates," Wilson said."There's a lot of stuff that's gotten dragged along here that's wildly speculative now, in my viewing. It's actually somewhat reckless. And that's the stuff you gotta be careful of if it's in your portfolio. You gotta get out of there," he warned.

He added that there are"plenty" of names that could go bankrupt, and overvalued stocks could plunge 20%"no problem" as the speculative rally loses steam and the market corrects The rally that kicked off 2023 has already begun to falter in recent weeks as investors brace for more rate hikes from the Federal Reserve. Fed Chair Jerome Powell on Tuesday kicked off a two-day testimony to lawmakers in Washington, DC, that struck a hawkish tone. Fed fund futures showed traders pricing in higher odds of a bigger rate hike at this month's policy meeting.

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