The Nasdaq has moved less than 0.5% so far this week, but many well-known tech names have experienced much larger price changes.
On the one hand, FAANG’s proverbial stocks, which have generally lowered Nasdaq performance since September, have risen this week.
Facebook (FB) – Get the report and Netflix (NFLX) – Get the report up about 4% from last Thursday’s close, Apple (AAPL) – Get the report increases by approximately 3.5% and Amazon.com (AMZN) – Get the report increases by approximately 4.5%. Alphabet (GOOG) – Get the report and Microsoft (MSFT) – Get the report they increase a little more than 1%.
Amazon could get a boost from a Monday press release that fooled the company’s holiday season sales. Among other things, Amazon revealed that sales for its holiday season with market sellers increased by more than 50% annually.
Apple, which has hit new highs this week, looks set to still receive a boost from last week’s Reuters report that it’s working on an electric car. The continued signs of strong demand for the iPhone may also help.
But while the tech giants are having a good week, the same can’t be said for many of Robinhood’s favorites, such as multi-multiple Internet, cloud software, and electric car games.
Zoom Video Communications (ZM) – Get the report, which sold out last week after a report on plans to launch email and calendar apps raised concerns about competitive pressures, has dropped another 6% this week. Similarly, the online TV service provider FuboTV (FUBO) – Get the report has fallen 16% this week, after being wrapped up last Thursday thanks to a very bearish report from LightShed Partners.
C3Ai (IA) – Get the report, which was offered until a bleeding assessment, despite having seen significant sales pressures related to COVID this year, has also dropped 16%. Snow flake (NEW) – Get the report has dropped 6%, Palantir Technologies (PLTR) – Get the report has dropped 11% and (thanks to a big sale on Tuesday) the developer of electric car batteries QuantumScape (QS) – Get the report down 14%.
What is causing this technological rotation? Year-end transactions carried out for reasons of fiscal rebalancing and portfolios could play an important role. Also, from Tesla (TSLA) – Get the report the entry into the S&P 500 a week ago is a potential catalyst.
The fact that S&P 500 index funds would have to cut their positions in FAANG and Microsoft stocks (MSFT) – Get the report helping make way for Tesla was a headwind in recent weeks for the stock of many technology names with capital letters, and that is now gone.
Meanwhile, Robinhood favorites could be pressured by the growing number of alarms raised by analysts and others about the astronomical valuations being granted to select technology companies that favor retail investors.
Over the weekend, the Wall Street Journal published an article noting that U.S. margin debt has topped $ 700 billion for the first time in history. The WSJ also reported (citing data from Options Clearing Corp.) that the volume of daily options contracts has increased by 48% this year and that investor and leveraged ETF inflows have reached their highest levels since 2008.
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