Technology Stocks: Undervalued or Overvalued?

Marc Andreessen, one of Silicon Valley’s biggest venture capitalists, and Warren E. Buffett, of Berkshire Hathaway, have two things in common: They are both worth huge amounts of money, with billions of dollars at their investing disposal, and they both try to invest in companies that are undervalued.

But these two business titans disagree about the importance of investing in technology.

In an interview in New York Times Magazine, Mr. Andreessen argues that compared with blue-chip companies like General Electric, big technology companies, including Microsoft, Cisco, Google and Apple, are very undervalued. Citing this point, Mr. Andreessen says the talk of a bubble is nonsense.

“Not only is there no bubble — these prices are reflective of the fact that the market still hates tech,” Mr. Andreessen said in the interview, referring to the stock price of many large tech companies. “This bubble talk is about everybody being unbelievably psychologically scarred from 10 years ago.”

Mr. Buffett disagrees. In an interview with the DealBook blog, he said he did not plan to invest in social networks and was still weary of the price of some tech stocks.

Mr. Buffett said he was looking for tech stocks to invest in that were “not crazy.”

“Most companies I don’t know how to value, there’s a few that I think I know how to value, and every now and then one of those are a price number that falls within my valuation range,” Mr. Buffett said.

But who is right? Are tech stocks overvalued? Is investing in Facebook at a $100 billion valuation a good bet for investors, or is this the same mentality that brought on the bubble that burst 10 years ago?