(1:00) - What Is Happening With Growth Stocks Right Now?
(6:45) - Which FANGMAN Is Performing The Best?
(12:10) - Breaking Down Microsoft and Apple: Who Will Have More Growth?
(16:30) - Struggling Growth Stocks: Is Now A Good Time To Buy?
(27:40) - What Will Drive Alphabets Growth Going Forward?
(31:30) - Can Tesla Continue Its Recent Rally?
(37:45) - Episode Roundup: META, AMZN, NFLX, GOOGL, MSFT, AAPL, NVDA, TSLA, MELI
Welcome to Episode #351 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
This week, Tracey is joined by Zacks new stock strategist, Andrew Rocco, for his first appearance on the Market Edge Podcast. They talked about Andrew’s expertise: growth stocks and took a look at the FANGMAN stocks and Tesla. Remember FANGMAN? It was originally Facebook, now known as Meta Platforms, Apple, Netflix, Google, now known as Alphabet, Microsoft, Amazon and NVIDIA.
The FANGMAN stocks were left for dead in 2022 as some of them fell more than 50% as the Fed raised rates and the 10-year treasury yield rose. Growth was “out” and that included big cap growth, especially technology stocks and Tesla.
But the FANGMAN stocks defied expectations to start the year, staging a big rally in January 2023. And some of them continued to rally in February
Are the FANGMAN stocks and other popular growth stocks like Tesla “back”?
AI as a Catalyst for Big Cap Tech
Meta Platforms got positively cheap in 2022, with a forward P/E as low as 13. Shares bottomed in Nov 2022 and have rallied 54% in 2023.
But Meta Platforms has also done layoffs and is cutting costs. Will it change its strategy on the Metaverse in 2023? What’s it’s plan for AI?
Meta Platforms is a Zacks Rank #2 (Buy) stock. Should Meta Platforms be on your short list?
NVIDIA has become the darling of growth investors in 2023 thanks to a bullish outlook on AI and earnings that are expected to grow over 30% this year.
Shares of NVIDIA have seen a huge rebound off of last year’s sell-off and are up 64% year-to-date.
But it’s not cheap. NVIDIA trades at 52x forward earnings. Is NVIDIA’s growth worth the high price?
From 2010 to 2020, Netflix was one of the top stocks on the S&P 500. But over the last 2 years, the shares are down 40%. However, they appear to have hit a bottom last October, as the shares have rebounded 43% in the last 6 months.
Yet even after the sell-off, NVIDIA isn’t cheap. It still trades with a forward P/E of 27.9.
Is a streaming service like Netflix the place to invest in 2023?
Tesla shares have been on a wild ride over the last 2 years. They are down 5.8% over the last 2 years after soaring at the start of the pandemic.
That ride continues in 2023, however. Shares have rebounded this year and are up 57% year-to-date. While earnings are expected to be down 2.7% in 2023, analysts expect a rebound of 28.6% in 2024.
Tesla shares are expensive on a P/E basis, trading with a forward P/E of 49. But are growth investors willing to ignore Tesla’s valuation to buy the growth?
Microsoft shares hit new highs during the pandemic but after last year’s sell-off, the shares are only up 9.7% in the last 2 years. However, that’s better than the performance of the S&P 500, which is up just 3.8% in that time period.
Microsoft has been in the spotlight due to the launch of ChatGPT, it’s AI product which has been available on Bing. Shares got an initial pop on the launch, but it’s only up 6.6% year-to-date.
Shares are also still pricey, with a forward P/E of 27.5. It pays a dividend yielding 1.1%.
Should Microsoft be on your short list?
What Else do you Need to Know About the Big Cap Tech Stocks in 2023?
Listen to this week’s podcast to find out.
[In full disclosure, Tracey owns shares of AMZN, GOOGL and MSFT in her own personal portfolio.]