The immediate road ahead may be a little more bumpy for the tech sector but the long term prospects for names like Kinaxis (Kinaxis Stock Quote, Chart, News TSX:KXS), Lightspeed (Lightspeed Stock Quote, Chart, News TSX:LSPD) and Shopify (Shopify Stock Quote, Chart, News TSX:SHOP) are still superb. That\u2019s the call from National Bank Financial analyst Richard Tse who delivered an update to clients on the sector on Tuesday, saying while this year\u2019s third quarter may not come with the same fireworks as Q2, growth expectations are still not fully priced into all the tech names. Last week\u2019s pullback in tech stocks came perhaps not as too much of a surprise after the major gains posted by many names in the space so far this year. And it\u2019s not only obvious work-from-home beneficiaries like Shopify, Amazon and Zoom Video which have been winners in the year of COVID-19, either, as tech companies across the board have seen demand for their products grow in response to changing work dynamics. Supply chain management company Kinaxis more than doubled in value between March and August as did mortgage lending and insurance platform Real Matters (Real Matters Stock Quote, Chart, News TSX:REAL) while cloud-based learning platform Docebo (Docebo Stock Quote, Chart, News TSX:DCBO) tripled over that time span. But the pullback is likely giving investors a moment of pause on tech, wondering where the sector is going from here. Tse says short-term valuations were, in fact, getting a bit extended and that has left the sector still at risk for potentially more downside. As well, where second quarter results were in many cases ahead of analysts\u2019 more conservative estimates in light of the pandemic, the upcoming third quarter may not deliver as many forecast beats and thus less market upside potential. Further, Tse maintained that even as the novelty of work-from-home created new secular themes for investors to latch onto over the first half of the year, much of that territory is now well known in the mainstream and functions as less of a boost for the sector as a whole. Tse wrote, \u201cWhile the short-term valuations may have been a bit extended, longer-term, we continue to believe the growth expectations being priced into the stocks are reasonable; while we don\u2019t believe calendar Q3 will be as good as Q2, we think the Q3 results will go to show why the strong secular growth names with strong underlying fundamentals will continue to report relatively stronger results to the weaker names; and while many of the secular growth themes are now known, we\u2019re of the view that while they won\u2019t catalyze the stocks from a news flow perspective to the same degree going forward, the potential opportunity in those names are still not fully \u2018priced-into\u2019 all the stocks over the long-term.\u201d \u201cWe continue to think there\u2019s an opportunity in some of our legacy names which have not seen the material valuation lift relative to the high-growth flyers (Docebo, Kinaxis, Lightspeed, Real Matters, Shopify),\u201d Tse wrote. \u201cWe\u2019d also say that those legacy names have strong underlying fundamentals to support their valuations (earnings and cash flow). As such, we think we\u2019ll see short-term relative outperformance in names like CGI and OpenText. That said, we continue to like our high flyers noted above and would look to opportunistically wade back in once the volatility settles,\u201d Tse said.