Bespoke's Paul Hickey Warns on Tech Sector Amid Market Volatility

This analysis is based on Paul Hickey’s appearance on CNBC’s “Power Lunch” on November 14, 2025, where the Bespoke Investment Group co-founder advised investors to “avoid adding to tech sector positions until things settle” [1]. The commentary comes amid significant market volatility, with major indices declining 2-3% from recent peaks, while megacap tech stocks trade at elevated valuations that warrant caution.

Hickey’s warning emerged during a period of heightened market volatility. From November 12-14, 2025, major indices experienced notable declines:

• S&P 500
  : Fell from 6,869 to 6,735 (~2% decline) [0]
• NASDAQ Composite
  : Dropped from 23,563 to 22,899 (~2.8% decline) [0]
• Dow Jones
  : Declined from 48,254 to 47,122 (~2.3% drop) [0]

Despite this overall weakness, the Technology sector showed relative resilience with a +2.49% gain on November 14, making it one of the better-performing sectors [0]. This divergence suggests selective strength within tech rather than broad-based weakness.

Hickey’s caution appears well-founded when examining current valuations:

• NVIDIA
  : 54.18x P/E - significantly above market averages [0]
• Tesla
  : 212.82x P/E - indicating extremely high growth expectations [0]
• Apple
  : 36.47x P/E - moderate but still elevated [0]
• Microsoft
  : 36.29x P/E - similar to Apple [0]
• Alphabet
  : 27.26x P/E - relatively more reasonable among peers [0]

These elevated multiples leave little room for earnings disappointments, particularly in a rising interest rate environment that typically pressures growth stock valuations.

The market appears to be experiencing a rotation away from pure growth toward more defensive positioning:

• Energy
  : +3.45% [0]
• Utilities
  : +3.25% [0]
• Financial Services
  : +1.78% [0]
• Consumer Cyclical
  : +1.29% [0]

This rotation pattern aligns with Hickey’s cautious stance on technology and suggests investors may be seeking more defensive positioning amid uncertainty.

Individual megacap tech stocks showed divergent performance on November 14:

• Microsoft
  : +1.37% to $510.18 - showing relative strength [0]
• NVIDIA
  : +1.77% to $190.17 - continuing momentum [0]
• Tesla
  : +0.59% to $404.35 - modest gain [0]
• Apple
  : -0.20% to $272.41 - slight decline [0]
• Alphabet
  : -0.78% to $276.41 - notable weakness [0]

The mixed performance suggests selective opportunities within tech rather than uniform weakness or strength.

Bespoke Investment Group, founded in 2007 by Hickey and Justin Walters, has established credibility in technical and quantitative market analysis. Both founders previously worked under renowned market strategist Laszlo Birinyi, lending weight to their market commentary [2].

Interestingly, Hickey’s near-term caution conflicts with historical seasonal patterns. According to Bespoke’s own research, when the S&P 500 enters Q4 with positive year-to-date performance (as it did in 2025 with +14.8% through Q3), Q4 has historically averaged +4.4% gains with positive returns 83% of the time since 1928 [3]. This suggests Hickey’s warning may be more tactical than strategic.

Trading volumes indicate heightened investor attention:

• NVIDIA
  : 178.65M shares (below 194.60M average) - elevated but below average [0]
• Tesla
  : 104.14M shares (above 87.55M average) - above average activity [0]
• Apple
  : 43.33M shares (below 51.43M average) - below average [0]

The volume patterns suggest selective interest rather than broad-based panic selling in tech stocks.

1. Valuation Risk
   : NVIDIA’s 54.18x and Tesla’s 212.82x multiples leave minimal margin for disappointment
2. Concentration Risk
   : Heavy market reliance on few megacap tech names creates systemic vulnerability
3. Interest Rate Sensitivity
   : Growth stocks typically underperform in rising rate environments
4. Earnings Season Risk
   : Upcoming Q4 reports and forward guidance could trigger volatility

Despite the cautionary stance, opportunities may emerge:

1. Selective Strength
   : Microsoft and NVIDIA showed relative resilience
2. Pullback Entry Points
   : Market volatility may create attractive entry levels for quality names
3. Sector Rotation Benefits
   : Defensive sectors showing strength may offer near-term opportunities

Decision-makers should closely watch:

• Technical support levels for major tech stocks and indices
• Q4 earnings results and forward guidance from tech companies
• Federal Reserve policy decisions and their impact on growth valuations
• Continued sector rotation patterns
• Volatility indices for market sentiment indicators

Paul Hickey’s warning to “avoid adding to tech sector positions until things settle” [1] comes amid a complex market environment characterized by:

• Recent Market Declines
  : Major indices fell 2-3% from November peaks [0]
• Elevated Tech Valuations
  : P/E ratios ranging from 27x (Alphabet) to 213x (Tesla) [0]
• Sector Rotation
  : Movement toward defensive sectors like Energy (+3.45%) and Utilities (+3.25%) [0]
• Mixed Tech Performance
  : Selective strength in Microsoft (+1.37%) and NVIDIA (+1.77%) versus weakness in Apple (-0.20%) and Alphabet (-0.78%) [0]

The analysis suggests Hickey’s caution is well-founded from a valuation perspective, though historical seasonal patterns favor Q4 strength. Investors should monitor upcoming earnings reports, interest rate developments, and technical levels for guidance on when “things may settle” enough to reconsider tech sector exposure.