Displaying items by tag: faangs

(New York)

IBM stock price rose about 4% on trading last week as the company had its first market-beating earnings report in some time and…see the full story on our partner Magnifi’s site

Published in Eq: Tech

(Silicon Valley)

The pandemic fueled growth in lots of different technology sectors, but it remains to be seen…see the full story on our partner Magnifi’s site

Published in Eq: Tech

(Silicon Valley)

Those with a lot of money in tech stocks may be starting to breathe a sigh of relief. After a rough period to start the year. The last few weeks has been quite positive for tech, so the worst may be behind us, right? The answer is that it may not be, according to some analysts. There are two huge trends (and one macro factor) that look likely to weigh on the sector for the next year. Firstly, three of the very largest stocks—Facebook, Apple, and Google, have gotten to the point in size where their growth is going to start inevitably slowing, which means the narrative around them will change. Additionally, the success of the vaccine rollout is increasingly, which means a reversal to pre-COVID norms seems likely. Tech stocks are also quite rate sensitive, which gives them a lot of “Fed risk”.


FINSUM: While it is hard to argue with the interest rate risk, we cannot get on board with the other two narratives. Everyone knows FAANG stocks are huge, the growth story is no secret. More generally though, we just don’t buy into the narrative that these stocks will suffer from the “reopening”. Consumer habits in many areas (e.g. grocery shopping and increased food delivery) have changed and that will continue to allow big tech stocks to grab market share and grow. Just ask your grown children and friends how they feel about going back to the grocery store….

Published in Eq: Tech
Wednesday, 22 July 2020 15:46

BlackRock Is Bullish on Big Tech

(San Francisco)

For a lot of people, BlackRock brings two things to mind: fixed income and ETFs. Therefore, the firm making a bold call about a handful of single name stocks comes as somewhat of a surprise. However, BlackRock is the largest asset manager in the world and is also a leader in equities. The call they are making today is that big tech companies are looking strong and likely to keep seeing price expansion. On the one hand, this is a very easy call to make given tech stocks have been soaring, but on the other, it is somewhat of an interesting and risky call because many fear FAANGs can really only go down in the short-term. BlackRock says that the cash flow producing abilities of tech companies (a factor proven to be vital in this downturn) will be critical to their continued success.


FINSUM: There might be some short-term tailwinds, but in our view, big tech companies are going to keep moving higher because this crisis has created a huge opportunity to grab market share as more of life moves online.

Published in Eq: Tech

(Seattle)

Investors might be growing a little uneasy if they have been paying attention to market leaders. A number of stocks that have led the big market rally are starting to falter, and that could be a sign of a major pullback to come. Amazon, Zoom, Netflix and other leaders of this rally have recently plateaued or dipped, which could be a sign that the rally has lost strength. If those stocks start to lose ground, a lot of the gains the market has seen are at risk because of the chance that investors could capitulate once the indexes loses leadership. One equity strategist at BTIG put it this way, “We’d suggest that the ability for the broad market to build on its recent gains is contingent on names like Zoom, Moderna, Netflix and Amazon and other highflying ‘shelter-in-place’ names whose momentum has waned in recent days, to at least sustain their meteoric advances as leadership passes off to the more cyclical areas and themes”.


FINSUM: We think there is a degree of truth in this. If the big gainers start to fade, it is hard to imagine the laggards will suddenly start holding the market up.

Published in Eq: Total Market
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