The Nasdaq is up less than 0.5% so far this week, but many well-known tech names have seen much larger price swings.
On the one hand, the proverbial FAANG stocks, which have generally underperformed the Nasdaq since September, have risen this week.
Facebook (FB) – Request report and Netflix (NFLX) – Request report are up about 4% each from last Thursday’s close, Apple (AAPL) – Request report is up about 3.5% and Amazon.com (AMZN) – Request report is up about 4.5%. Alphabet (GOOG) – Request report and Microsoft (MSFT) – Request report are each up just over 1%.
Amazon could get a boost from a Monday press release announcing the company’s holiday sales. Amazon announced, among other things, that sales during the holidays with sellers in the market increased by more than 50% annually.
Apple, which set 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. Persistent signs of strong iPhone demand can also help.
But while the tech giants are having a good week, the same can’t be said for many Robinhood favorites like high-multiple internet, cloud software, and electric car games.
Zoom video communication (ZM) – Request report, which sold out last week after a report about plans to launch email and calendar apps raised concerns about competitive pressures, dropped another 6% this week. Likewise, online TV service provider FuboTV (FUBO) – Request report has fallen 16% this week, after it rocketed last Thursday thanks to a very bearish LightShed Partners report.
C3Ai (AI) – Request report, which despite the large COVID-related sales pressure this year offered up to a nosebleed reading, is also down 16%. Snowflake (SNOW) – Request report 6% down, Palantir Technologies (PLTR) – Request report 11% and (thanks to a big sale on Tuesday) developer of electric car batteries QuantumScape (QS) – Request report is down 14%.
What causes this technical rotation? Year-end transactions executed for tax and portfolio rearrangement reasons may play a role. Also Teslas (TSLA) – Request report entry into the S&P 500 a week ago is a potential catalyst.
The fact that S&P 500 index funds had to curtail their positions in FAANG stocks and Microsoft (MSFT) – Request report Making room for Tesla has been a headwind for the stocks of many big tech names in recent weeks, and one that has now disappeared.
Meanwhile, Robinhood favorites may come under pressure from the growing number of alarm bells being issued by analysts and others about the astronomical valuations now being awarded to select technology companies favored by private investors.
Over the weekend, The Wall Street Journal published a piece noting that the US margin debt has risen above $ 700 billion for the first time in history. The WSJ also reported (using data from Options Clearing Corp.) that the volume of daily options contracts is up 48% this year and that inflows of leveraged and inverse ETFs are at their highest levels since 2008.
Apple, Facebook, Amazon, Alphabet and Microsoft Jim Cramer’s companies Action Alerts PLUS Charitable Trust Portfolio. Want to be kept informed before Cramer buys or sells these shares? Read more now.