Bill Ackman and Cathie Wood lead the charge back into tech stocks as the sell-off attracts dip-buyers

Bill Ackman and Cathie Wood have snapped up shares in technology companies, as the sell-off attracts dip-buyers.
Hedge fund legend Ackman said last week that he thinks Netflix is a bargain at its current price.
Star stock-picker wood has doubled down on her bet on Tesla, buying more than $20 million of stock.

Hedge-fund legend Bill Ackman and star stock-picker Cathie Wood are leading the charge back into technology stocks after a steep sell-off made prices look more appealing.

Ackman last week bought $1.1 billion of shares in Netflix, saying the streaming service looked "extraordinarily attractive."

Wood's flagship Ark Innovation exchange-traded fund on Thursday purchased more than $20 million of Tesla stock, and on Friday it snapped up more shares in trading platform Robinhood.

Ackman and Wood's purchases are a sign that some investors think the sell-off in technology stocks has gone too far.

The Nasdaq 100 index has fallen around 10% this year, but was up close to 2% on Monday morning as many technology companies rebounded.

Investors have ditched fast-growing tech stocks in 2022, as they brace for the Federal Reserve to hike interest rates sharply in its bid to get a grip on inflation.

Unprofitable technology stocks have fared the worst as investors look for cheaper companies that can deliver good returns, given inflation looks set to stay hot.

Yet the sell-off has also whacked the biggest names in the market, from Tesla and Netflix to Apple and Amazon. That's lured in dip-buyers who scent a bargain.

Tesla has fallen around 30% since hitting a record high in November of $1,243.49, and has slumped more than 15% this year.

The sell-off has clearly made the electric-vehicle maker more attractive in the eyes of Wood, whose Innovation ETF bought more than $20 million of its shares on Thursday. It was ARKK's first Tesla purchase for eight months.

Wood said last week she welcomes volatility and uses it as a chance to focus on her "highest conviction names."

Media-streaming giant Netflix hit an intraday high of more than $700 in November, but has since slumped roughly 40%. It dropped more than 20% in a day earlier this month, after warning subscriber growth would slow sharply.

The move lower attracted Ackman's Pershing Square investment group, which has built a stake of around 3.1 million shares.

"Many of our best investments have emerged when other investors, whose time horizons are short-term, discard great companies at prices that look extraordinarily attractive when one has a long-term horizon", Ackman wrote in a letter to Pershing investors last week.

Mark Haefele, chief investment officer at UBS Global Wealth Management, said: "The sharp fall in many high-quality tech firms is already creating opportunities for longer-term investors to add exposure.

"Rather than giving up on tech in the face of near-term headwinds, we recommend a more selective approach."

Credit Suisse analysts on Monday upgraded their official rating of Tesla stock to say they think it will "outperform" over the next 12 months. Dany Levy and Trevor Young predicted the car-maker will rally more than 10% over the coming year to $1,025.

Netflix was up 8.06% Monday to $415.32, as of 10.58 a.m. ET, while Tesla rose 8.52% to $918.46. Robinhood was 9.19% higher at $13.88.

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