The Nasdaq has changed less than 0.5% so far this week, but many well-known names in the technology have seen much greater price changes.
On the one hand, FAANG’s proverbial shares, which have generally underperformed Nasdaq since September, rose this week.
Facebook (FB) – Get report and Netflix (NFLX) – Get report are each about 4% above last Thursday’s closing, Apple (AAPL) – Get report rose about 3.5% and Amazon.com (AMZN) – Get report increased by about 4.5%. Alphabet (GOOG) – Get report and Microsoft (MSFT) – Get report each is just over 1%.
Amazon may be getting a boost with a press release on Monday that boasted sales for the company’s holiday season. Among other things, Amazon reported that its sales in the holiday season involving market vendors increased by more than 50% per year.
Apple, which hit new highs this week, still appears to be getting a boost from last week’s Reuters report that it is working on an electric car. Continuing signs of strong demand for the iPhone may also be helping.
But while the tech giants are having a good week, the same cannot be said of many Robinhood favorites, such as multiple high-speed internet, cloud software and electric car games.
Zoom Video Communications (ZM) – Get report, which sold last week after a report on plans to launch email and calendar apps raised concerns about competitive pressures, fell another 6% this week. Likewise, the online TV service provider FuboTV (FUBE) – Get report fell 16% this week after being defeated last Thursday, thanks to a very pessimistic LightShed Partners report.
C3Ai (THERE) – Get report, which was bid on with an exorbitant valuation, despite seeing great sales pressures related to COVID this year, also fell 16%. Snowflake (SNOW) – Get report fell 6%, Palantir Technologies (PLTR) – Get report dropped 11% and (thanks to a big sale on Tuesday), the developer of electric car batteries QuantumScape (QS) – Get report fell 14%.
What is causing this technological rotation? End-of-year negotiations for reasons of fiscal and portfolio rebalancing may be playing an important role. In addition, Tesla’s (TSLA) – Get report entry into the S&P 500 a week ago is a potential catalyst.
The fact that the S&P 500 index funds had to reduce their positions in FAANG and Microsoft shares (MSFT) – Get report helping to make room for Tesla has been an obstacle in recent weeks for the actions of many high-tech names, and one that is now over.
Meanwhile, Robinhood’s favorites can be pressured by the growing number of alarms raised by analysts and others about the astronomical assessments that selected technology companies favored by retail investors are now being awarded.
Over the weekend, The Wall Street Journal published an article noting that US margin debt rose above $ 700 billion for the first time in history. The WSJ also reported (citing data from Options Clearing Corp.) that the daily volume of option contracts has increased 48% this year, and that flows of leveraged and reverse ETFs have reached their highest levels since 2008.
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