Up 13%- You Can Always Count on Big Tech
Another story of Big Tech driving the broader market. We just saw this story on Tuesday.
On 26th July,
$Wal-Mart(WMT)$ lowered its guidance and the broader market fell.
After the bell $Microsoft(MSFT)$ and $Alphabet(GOOG)$ released earnings that slightly missed expectations but reassured investors and the $NASDAQ(.IXIC)$ jumped 4%.
Nasdaq jumped 4%
Yesterday,
2Q GDP data was released at -0.9% YoY, below expectations of +0.5%. Stocks began to fall, with Chinese stocks falling more. As of close, most companies closed slightly higher.
After the bell, $Apple(AAPL)$ and $Amazon.com(AMZN)$ released their earnings, Amazon jumped 13% and its price has surpassed the previous high of $125.
Poster made by Tiger_chat
Why did big tech rise although they missed expectations?
1) Market sentiment has improved since last week's 3-day winning streak.
2) The market has priced in expectations that it may miss, and the valuation has fallen before due to the decline, big tech has no more room to fall.
3) Stable revenue and business.
But small companies still have room to fall:
For example, $Teladoc Health Inc.(TDOC)$ plunged 17%.
1) Under the background of economic headwinds, many companies have not achieved stable profits. Their earnings may disappoint the market
2) Valuation is too high, the share price may fall further
Bottom Line
Data from tradingview
Big tech such as $Tesla Motors(TSLA)$ , $Microsoft(MSFT)$ , $Alphabet(GOOG)$ , $Apple(AAPL)$ all delivered a "not bad earnings" in this earnings season.
In the economic headwinds, we can always count on big tech!
Do you think big tech is your first pick?
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Also, big tech will rebounce the most after a bear 🐻 market [Doubt]?
At least that's what I heard [Grin].
Better than all the rest
Small tech can be multi-bagger
But Big tech is always more stable
Buy low, sell high is the game
If you buy undervalued, it's all the same 😄
It would seem that there is a current rotation from Value Stocks to Growth Stocks especially Big Tech Stocks like Apple, Amazon and Microsoft. Big Tech like these 3 stocks are fundamentally very strong. They are profitable and have very strong balance sheet and free cash flow that can stand the volatility of the markets.
However I believe that this is not a market bottom but rather a Bear Market rally. Going forward, a lot depends on signals that inflation won't keep rising, strong economic data and the Feds' action on interest rates.
Nonetheless I am bullish on Apple, Microsoft, Amazon as they are resilient in volatile times. In fact they can be regarded as defensive stocks due to their strong moats and excellent management. They are on my conviction stock list as my time horizon is at least 10 to 20 years. It is time in the market that counts, not timing the market.
@Tiger_chat @TigerStars @CaptainTiger