GraniteShares comments on tech stocks: Investors bank on long-term growth for tech giants
Sign up to our free newsletters
Will Rhind, Founder and CEO at GraniteShares
Mega-cap tech stock Microsoft, Meta (Facebook), Alphabet (Google) and Amazon all report Q1 earnings this week with analysts looking for evidence of stock price recovery. Data from GraniteShares, which offers 3x short and 3x leveraged/long ETPs on these individual stocks and baskets of the stocks, shows investors expect long-term growth with most going long to multiply potential gains. Its baskets of stocks include FAANG – Facebook, Amazon, Apple, Netflix and Google – as well as FATANG – Facebook, Amazon, Tesla, Apple, Netflix and Google – and GAFAM – Google, Amazon, Facebook, Apple and Microsoft.
Will Rhind, Founder and CEO of GraniteShares, said: “The market focus has tended to be on the next Federal Reserve meeting on May 2nd and 3rd and the next inflation numbers on May 10th with a rate rise or signs of inflation rising again likely to spark sell-offs.
“Bad news or a surprise from any of the tech giants could also set off a major market reaction but in general all four shares are in recovery mode after major declines. Microsoft is still around 18% below its highs as investors wait to see when growth will return. Analysts appear to believe that won’t happen until next year but any positive signs in Q1 will be welcome. Meta has benefited from cost cutting with shares up around 130% since November but is still around 45% below its highs indicating the recovery could still have some way to go. Alphabet is also reporting following major job cuts costing up to $2.3 billion and while the shares are up around 20% year to date they are still 14% lower than a year ago. The focus is likely to be on the advertising outlook which has been weak particularly among financial companies. Amazon meanwhile is also coming off the back of job cuts and its shares are 40% off their highs and back to pre-COVID levels. Cost cutting is likely to see it return to growth.
“The tech giants have been through a major sell-off partly driven by interest rate rises and worries about inflation but investors are going long now on the basis that the brutal cost-cutting will pay off. The short-term concern remains about interest rates and inflation but longer term it seems investors are still supportive.”
Source: ETFWorld.co.uk
Subscribe to Our Newsletter
