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The Zacks Analyst Blog Highlights XLK, VGT, FTEC, ONLN and VCR

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For Immediate Release

Chicago, IL – November 30, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. ETF's recently featured in the blog include: Technology Select Sector SPDR Fund (XLK - Free Report) , Vanguard Information Technology ETF (VGT - Free Report) , Fidelity MSCI Information Technology Index ETF (FTEC - Free Report) , ProShares Online Retail ETF (ONLN - Free Report) and Vanguard Consumer Discretionary ETF (VCR - Free Report) .

Here are highlights from Tuesday’s Analyst Blog:

Should You Follow George Soros Bottom-Fishing Tech?

U.S. tech stocks have been hitting rough weather this year as surging inflation has been weighing on their lofty valuations caused by massive policy easing since the COVID-19 outbreak. Although tech stocks tried to recoup losses several times, investors remained cautious about betting big on growth stocks. Hence, shares of high-growth technology companies remain in a tight spot.

Among the group of mega-cap companies, Amazon is down about 44% this year. Google parent Alphabet and Facebook parent Meta have declined about 32% and 66%, respectively. All three companies are on a cost-cutting mode thanks to waning consumer demand, subdued ad spending, and inflationary pressure on wages and products.

George Soros Bets Big on Alphabet

Against this backdrop, billionaire investor George Soros, through his firm Soros Fund Management (SFM), held 53,175 Alphabet shares as of Jul 31. Three months later, his stake in Alphabet rose to 1,01 million shares, marking an increase of 1,806%, according to a regulatory filing, as quoted on thestreet.com. Soros scooped up shares in the quarter in which Alphabet stock prices declined 12.2% of their value.

Alphabet's third-quarter results were driven by its strength in the cloud business. Solid momentum across the Other Bets segment was a positive. Robust cloud division remains the key catalyst. Expanding data centers will continue to bolster its presence in the cloud space.

Also, strong focus on AI techniques and the home automation space should aid business growth. The company's growing efforts to gain a foothold in the healthcare industry are the other catalysts. Its deepening focus on the wearables category continues to act as a tailwind. Alphabet's expanding presence in the autonomous driving space is contributing well.

Alphabet's revenues are likely to gain 10.4% year over year and earnings are likely to decline 16.6% in 2022, as suggested by the Zacks Consensus Estimate. However, sluggishness in the advertisement business remains a major headwind.

If you are skeptical about Alphabet itself, you can bet on Alphabet-heavy ETFs like Technology Select Sector SPDR Fund (Alphabet weight – 22.64%), Vanguard Information Technology ETF (Alphabet weight – 22.61%) and Fidelity MSCI Information Technology Index ETF (Alphabet weight – 21.51%). XLK, VGT and FTEC have lost 22.7%, 24.9% and 24.8%, respectively this year.

Soros Sells Certain Amazon Shares But Still Holds a Lot

SFM owns 1,981,161 Amazon shares compared to 2,004,500 in the second quarter. This marks a small decrease of 1.16%. This means that Soros still has faith in the e-commerce giant. Amazon's third-quarter results were driven by Prime and AWS momentum. Strengthening AWS services portfolio and its growing adoption rate contributed well.

Ultrafast delivery services and an expanding content portfolio were beneficial. Strengthening relationship with third-party sellers was also a positive. Growing capabilities in grocery, pharmacy, Amazon Care, Kuiper and Zoox also helped. Amazon is likely to record 8.63% sales growth in 2022 while earnings are likely to nosedive a solid 102%, going by the Zacks Consensus Estimate.  

There are a lot of Amazon-heavy ETFs that include ProShares Online Retail ETF (Amazon weight – 19.18%) and Vanguard Consumer Discretionary ETF (Amazon weight – 19.11%).

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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