Big-Tech’s Performance
Trading was relatively light this week with the Thanksgiving holiday, but the main market themes remained the same.The previously over-traded "strong dollar" also pulled back, as did US bond yields.
The year-end market may be building momentum as well, with headline tech companies moving at different paces on the one hand, while risk sentiment remains high for small-cap stocks and Bitcoin on the other.
Through the close of trading on Nov. 28, big tech companies were mixed over the past week. $Apple(AAPL)$ +2.59%, $NVIDIA Corp(NVDA)$ -7.23%, $Microsoft(MSFT)$ +1.81%, $Amazon.com(AMZN)$ +1.41%, $Alphabet(GOOG)$ $Alphabet(GOOGL)$ -3.84%, $Meta Platforms, Inc.(META)$ +0.65% and $Tesla Motors(TSLA)$ -2.67%.
Big-Tech’s Key Strategy
Amazon's Holiday and Afterwards
Amazon has two important events in the near future: the Black Friday shopping season and its own Trainium 2 AI chip.
The shopping season is crucial for both Amazon's e-commerce and offline superstores, and market expectations for the season are high.
According to statistics.blackfriday, total U.S. holiday sales are expected to reach $240.8 billion this year as inflation eases.Among them, Black Friday sales are expected to record the highest growth rate since 2020, reaching $10.8 billion, a year-on-year growth rate of 9.9%; 71% of users will choose to shop online, and Cyber Week sales are expected to reach $40.6 billion, accounting for 6.9% of total spending, a year-on-year increase of 7%.
By that math, Amazon, the e-commerce company with the highest market share, could get a good share of sales this shopping season.The current Q4 Consensus revenue growth rate of 5.67% for online stores, 4.83% for brick-and-mortar stores, and +11.11% for three-way sellers, of which the online stores had a relatively high base last year.
But Amazon is currently facing the biggest problem is competition, in addition to low-priced e-commerce Shein, Temu, the successful transformation of the traditional superstore $Wal-Mart(WMT)$ , but also its market share is climbing.What's more: inflation in Amazon's FBA fees (seller logistics) may be limited by Walmart's competitive entry into off-site logistics and fulfillment and its announcement that it will not increase its prices in 2025 (to attract more sellers to use its platform by keeping its FBA fees stable), and thus may have an impact on margins in 2025.
In addition, unlike other Mag 6s, Amazon is actively developing its own AI chips rather than just relying on Nvidia.
The layout of Amazon's chip field began in 2013, and since then in 2015, Amazon acquired Annapurna Labs for about $350 million, and developed the Inferentia series (focusing on AI inference computing), and the Trainium series (for AI model training).The current Trainium 2 is the core project of its AI chip program.
In contrast to Nvidia's Blackwell series, Amazon's homegrown Trainium 2 series is designed for AWS infrastructure and can seamlessly integrate with its existing data centers, a customization that allows Trainium 2 to excel in specific application scenarios.The company plans to launch a new chip every 18 months.
From this perspective, it also explains why Amazon, which is based on cloud services, has been growing its capital expenditures at a faster rate in recent quarters. capital expenditures in 2025 are also expected to reach $75-80 billion.
Summary of expectations:
E-commerce is expected to get higher revenue in shopping season, but competition is fierce, FY25 margins may be affected by FBA expenses;
Capital expenditure is high, but future self-developed chips may bring higher autonomy, scale instead to reduce costs and feed back;
Is the Mag 7 in the least repurchase, the future is expected to open repurchase
Big-Tech Weekly Options Watcher
THIS WEEK WE WATCH: AAPL (250 by the end of the year?)
AAPL: The end of the year is approaching, the end of the Christmas market has always been one of the most important institutional trading period.Apple in the market value back to the list of one, once again become "idle money" favor, as at the same time even have the attribute of risk aversion of technology stocks, become an important subject to make up the beta.From the performance of its options, the current week and next week's open Call median around 235, while mid-December to 240, the end of December to 245 or so, gradually advancing trend also indicates further bullish end of the market.
Big-Tech Portfolio
The Magnificent Seven form a portfolio (the "TANMAMG" portfolio) that is equally weighted and reweighted quarterly.The backtest results are a far outperformer of the $.SPX(.SPX)$ since 2015, with a total return of 2,293.96% and a $SPDR S&P 500 ETF Trust(SPY)$ return of 245.94% over the same period, for an excess return of 2,048.02%.
Big tech stocks underperformed this week, but year-to-date returns are still there to 51.34%, outperforming the SPY by 27.18%, and the excess return remains at 24.16%.
The portfolio's Sharpe Ratio over the past year has rebounded to 2.26, the SPY is 2.4, and the portfolio's Information Ratio is 1.23.
Comments
Big-Tech Portfolio is promising nowadays