Morgan Stanley believes the dramatic drops in some high-flying technology stocks this month is further evidence the stock market will go lower. 

"The weaker earnings beat from several Tech leaders and outright misses from Netflix and Facebook were simply additional support for our [defensive] call," chief U.S. equity strategist Michael Wilson said in a note to clients Monday. 

And the average investor could suffer even more this time, Wilson said. 

"We think a coming correction will be biggest since February, although it could very well have more of a negative impact on the average portfolio if it is centered on Tech, Discretionary, and small caps," the note said. 

Facebook shares dropped 19 percent last Thursday, a day after it reported lower-than-expected second-quarter sales and daily active user numbers, resulting in the biggest one-day market value loss for a single U.S. stock in history.  Netflix shares declined 14 percent this month through Monday after the streaming giant missed subscriber expectations for its second-quarter on July 16. 

Wilson noted the relative valuation between growth and value stocks was only higher during the dot-com bubble.  He also pointed out that the 10-year return disparity between the Russell 1000 Growth index over the Russell 1000 Value index is at its 96th percentile since 1980. 

"Large Cap Growth stocks have outperformed US Large Cap Value stocks by an almost unprecedented amount over both the recent past and prior decade," he said. " Fighting momentum is a difficult game but when you time it right, it can very profitable.  We think one of those times is now for Growth shifting to Value." 

The S&P 500 fell more than 10 percent from its highs in late-January through early February as investors reacted to a stronger-than-expected jobs report and wage number, sparking concerns over future rising interest rates. 

In comparison, the market is down about 1.5 percent from its monthly high on Wednesday through Monday.  The strategist reiterated his 2,750 12-month target for the S&P 500, representing 2 percent downside to Monday's close. 

Wilson reaffirmed his overweight ratings for utilities, energy, industrials and financials sectors, which should outperform in a more difficult market environment, he said. 

Earlier this month the strategist turned defensive on the market, downgrading small-cap stocks to equal weight and lowering his rating for technology stocks to underweight.  In 2017, Wilson was one of the most bullish strategists on Wall Street.