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Investors Are Now Piling Into the Emerging Market Equivalent of the FANGs

  • Developing-nation technology stocks trade at 30% discount
  • Gap expected to narrow going forward as profitability rises
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Wells Fargo's Cronk Is Looking for a Tech Correction

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Investors weary of the biggest U.S. technology stocks after their unprecedented rally and recent bout of volatility are eyeing cheaper alternatives in emerging markets.

Just like their U.S. counterparts, developing-nation tech giants including Samsung Electronics Co. and Tencent Holdings Ltd. have surged this year, but their valuation discount is near the highest in 18 months. For emerging-market bulls, the thinking goes why buy Amazon.com Inc. at 67 times projected earnings when Alibaba Group Holding Ltd.’s ratio is just 29 times.