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“Bull markets are born on pessimism, grown on skepticism, mature on optimism, and die on euphoria.” -Sir John Templeton
The time has come to reevaluate the growth story as big tech stocks roar back to life to kick off the new year. The beaten down MATANA stocks – Microsoft (MSFT - Free Report) , Apple (AAPL - Free Report) , Tesla (TSLA - Free Report) , Alphabet (GOOGL - Free Report) , NVIDIA (NVDA - Free Report) , and Amazon (AMZN - Free Report) – are all up double-digit percentages off their respective lows.
The move follows a period of severe underperformance in 2022, as growth names took a backseat amid fears of an economic slowdown. Many investors are still unconvinced that technology stocks (along with the major indices) have already bottomed, adding fuel to the bullish case. Remember – bull markets climb a wall of worry.
Microsoft has been in the news recently due to its partnership with OpenAI, investing billions of dollars into the artificial intelligence lab behind the online chatbot ChatGPT. Arguably a move aimed to compete with Google-parent Alphabet, the investment aims to keep MSFT at the center of generative artificial intelligence – a set of technologies that are able to generate text, images, and other media in response to user questions.
A Zacks Rank #3 (Hold) stock, MSFT has lagged a bit versus its peers. The company is set to announce Q4 earnings results tomorrow after the bell. Analysts are expecting MSFT to deliver quarterly EPS of $2.29/share, a -7.66% decline versus the same quarter a year ago.
Tesla is also due to report fourth-quarter results tomorrow, where the earnings picture is a bit brighter. Earnings are projected to have risen 31.76% year-over-year to $1.12/share on revenues of $24.05 billion. The electric car maker was one of the last to bottom out in December but has since risen more than 25% off the lows. TSLA is currently a Zacks Rank #5 (Strong Sell) stock.
As one of the leading AI companies, NVIDIA has also been at the forefront of the ChatGPT conversation, as the company headlines the graphics chips that are designed for complex computing applications. NVDA, currently a Zacks Rank #4 (Sell) stock, has rallied more than 65% off its October low. With earnings estimates evolving for this chip leader, I believe this rating will change to reflect a more bullish outlook.
Alphabet has witnessed a streak of earnings misses lately, falling short of the mark in each of the past three quarters. A Zacks Rank #3 (Hold), GOOGL stock shed about 45% of its value before rallying nearly 20% off its November low. GOOGL is set to report Q4 earnings on February 2nd, where analysts are expecting a -23.53% profit decline to $1.17/share versus the same quarter in the prior year.
It’s a similar story for Amazon, having missed earnings estimates in each of the past three quarters. AMZN is a Zacks Rank #3 (Hold) and reports Q4 results in early February as well. AMZN is expected to post a year-over-year quarterly EPS decline of -87.77% to $0.17/share. The stock has rallied nearly 20% off the low.
Lastly, Apple has surged to kick off the new year after ending 2022 near a low in price. In fact, AAPL didn’t find a bottom for the move until early this year. Despite a weak period last year, AAPL was still able to surpass earnings estimates in each of the past four quarters. While the tech behemoth ultimately succumbed to the bear market, prospects are looking up as the stock has rallied about 10% to start the new year with a bang.
It’s important to remember that the market is forward-looking and is already taking into account earnings in future quarters. At major turning points, stocks are often able to rally past subpar earnings announcements because the downside has already been priced in. Even slightly better-than-expected results can trigger powerful upside momentum.
Investors will want to keep an eye on the MATANA stocks as well as the tech sector as signs are abundant that the growth story has returned.
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MATANA Is Back: Which Stocks to Buy Now
“Bull markets are born on pessimism, grown on skepticism, mature on optimism, and die on euphoria.” -Sir John Templeton
The time has come to reevaluate the growth story as big tech stocks roar back to life to kick off the new year. The beaten down MATANA stocks – Microsoft (MSFT - Free Report) , Apple (AAPL - Free Report) , Tesla (TSLA - Free Report) , Alphabet (GOOGL - Free Report) , NVIDIA (NVDA - Free Report) , and Amazon (AMZN - Free Report) – are all up double-digit percentages off their respective lows.
The move follows a period of severe underperformance in 2022, as growth names took a backseat amid fears of an economic slowdown. Many investors are still unconvinced that technology stocks (along with the major indices) have already bottomed, adding fuel to the bullish case. Remember – bull markets climb a wall of worry.
Microsoft has been in the news recently due to its partnership with OpenAI, investing billions of dollars into the artificial intelligence lab behind the online chatbot ChatGPT. Arguably a move aimed to compete with Google-parent Alphabet, the investment aims to keep MSFT at the center of generative artificial intelligence – a set of technologies that are able to generate text, images, and other media in response to user questions.
A Zacks Rank #3 (Hold) stock, MSFT has lagged a bit versus its peers. The company is set to announce Q4 earnings results tomorrow after the bell. Analysts are expecting MSFT to deliver quarterly EPS of $2.29/share, a -7.66% decline versus the same quarter a year ago.
Tesla is also due to report fourth-quarter results tomorrow, where the earnings picture is a bit brighter. Earnings are projected to have risen 31.76% year-over-year to $1.12/share on revenues of $24.05 billion. The electric car maker was one of the last to bottom out in December but has since risen more than 25% off the lows. TSLA is currently a Zacks Rank #5 (Strong Sell) stock.
As one of the leading AI companies, NVIDIA has also been at the forefront of the ChatGPT conversation, as the company headlines the graphics chips that are designed for complex computing applications. NVDA, currently a Zacks Rank #4 (Sell) stock, has rallied more than 65% off its October low. With earnings estimates evolving for this chip leader, I believe this rating will change to reflect a more bullish outlook.
Alphabet has witnessed a streak of earnings misses lately, falling short of the mark in each of the past three quarters. A Zacks Rank #3 (Hold), GOOGL stock shed about 45% of its value before rallying nearly 20% off its November low. GOOGL is set to report Q4 earnings on February 2nd, where analysts are expecting a -23.53% profit decline to $1.17/share versus the same quarter in the prior year.
It’s a similar story for Amazon, having missed earnings estimates in each of the past three quarters. AMZN is a Zacks Rank #3 (Hold) and reports Q4 results in early February as well. AMZN is expected to post a year-over-year quarterly EPS decline of -87.77% to $0.17/share. The stock has rallied nearly 20% off the low.
Lastly, Apple has surged to kick off the new year after ending 2022 near a low in price. In fact, AAPL didn’t find a bottom for the move until early this year. Despite a weak period last year, AAPL was still able to surpass earnings estimates in each of the past four quarters. While the tech behemoth ultimately succumbed to the bear market, prospects are looking up as the stock has rallied about 10% to start the new year with a bang.
It’s important to remember that the market is forward-looking and is already taking into account earnings in future quarters. At major turning points, stocks are often able to rally past subpar earnings announcements because the downside has already been priced in. Even slightly better-than-expected results can trigger powerful upside momentum.
Investors will want to keep an eye on the MATANA stocks as well as the tech sector as signs are abundant that the growth story has returned.