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There has been of flurry of activity in the tech sector, with the recent sell-offs and the more recent rally . While that may give some investors pause, veteran tech investor Trent Masters continues to see promise, revealing four stocks he has a “high degree of conviction” in. They are: Nvidia , Motorola Solutions , Trane Technologies and Sherwin-Williams . Nvidia Top of Masters’ list is this artificial intelligence darling, which has dominated headlines in the last year. Its popularity shows little sign of abating, and although the stock is down around 9.7% in the last three months, it is still up by nearly 141% over the year to date. “The degree of movement … in such a big stock is quite phenomenal,” Masters, a portfolio manager at Sydney-based Alphinity Investment Management, told CNBC’s ” Street Signs Asia ” on Sept. 12. Shares in Nvidia jumped on Wednesday after its CEO Jensen Huang’s comments on the company’s innovation plans and the future of AI. That came after investors’ skepticism on the stock after its quarterly results announcement on Aug. 28 . Masters, however, calls its earnings “solid.” Adjusted earnings per share came in at 68 cents — better than the 64 cents expected — while its revenue of $30.04 billion exceeded the $28.7 billion that was forecast. “I don’t think Nvidia is in that category now where they blow the doors off in terms of results, because the market is more aware of the potential of their AI accelerators and what that market demand could be,” Masters noted. FactSet data shows that most analysts remain bullish on Nvidia. Of the 63 analysts covering the stock, 59 give it a buy or overweight rating, while just four have a hold rating. Analysts’ average price target is $149.49, giving it 25.5% potential upside. Masters said he’s “quite encouraged” by the applications coming out of the AI powerhouse, adding that its cloud demand remains strong while hyperscalers’ capital expenditure is quite positive. “In that perspective, I can see that earnings path for Nvidia towards $5 — and if you see them making $5 in EPS (earnings per share), the valuation is not demanding at all. So, I do remain quite positive on Nvidia,” he said. Motorola Solutions Masters said he likes electronics manufacturer Motorola even if it comes from a “very unsexy end of tech.” “This isn’t a stock like Nvidia that you might wake up one day and it beats by 20% (or) 30%. It is just a really nice, strong, compounding business that always just manages to execute well and beat market expectations,” he said. The company’s strength is its Land Mobile Radio devices — walkie-talkies used for various communications, especially during emergencies — which accounts for 70% of the business, the portfolio manager said. He added that there’s “an upgrade cycle with a new device that’s come out called APX and that’s just giving a nice little tailwind to growth.” Shares in Motorola are up around 41.1% year-to-date. According to FactSet data, of 15 analysts covering the stock, 10 give it a buy or overweight rating, four have a hold rating and one has an underweight rating. Their average price target is $449.63, giving it 1.8% potential upside. Trane Technologies Beyond the traditional tech plays, Masters is betting on Trane Technologies, a company specializing in heating, ventilation, air-conditioning and refrigeration systems. It’s among the “top four players,” with a market share of 75% in its industry and is exposed to the tech industry through data centers, the portfolio manager noted. There is “maybe a little bit of the AI kind of excitement, but [it is] just an incredibly well-executing business (that) generates really strong free cash flow and again has consistently outperformed market expectations.” Its second-quarter revenue came in at a record $5.3 billion — up 19% year on year . Year-to-date, shares in Trane Technologies are up 49.3%. Of the 25 analysts covering the stock, nine give it a buy or overweight rating, 14 have hold ratings and two have a sell rating. The average price target for Trane Technologies is $361.46, according to FactSet data, giving it a 0.8% discount. Sherwin-Williams Outside tech, Masters likes paint manufacturer Sherwin-Williams thanks to its “very strong … business (with a) good returns profile.” “The positive that you have there is that (its) business normally grows at, say, mid single digits. As you start to get a little bit of that housing activity coming back, we can see a path for that to start to grow up towards the high single digits,” he added. Shares in Sherwin-Williams have rallied in the past three months with a gain of 26.4%. Year-to-date, its shares are up almost 20.1%. Of the 30 analysts covering the stock, 16 give it a buy or overweight rating, 12 have hold ratings and two have a sell rating. The average price target for Sherwin-Williams is $375.59, according to FactSet data, giving it 0.1% potential upside. — CNBC’s Jim Cramer contributed to this report.
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