ARE VERY DIFFERENT THAN THIS:
GOOGL’s one day market cap gain last Friday of about$60 billion was equal to more than the combined market capitalization’s of FTNT & NFLX (even after their massive gaps to new highs), and AMZN’s pre-market gains of nearly $50 billion has the potential to do the same as the stock will likely close on its high.
As an independent market participant I come up with all sorts of ideas, some very consensus, and others a bit contrarian. As a part time market pundit in this space and on CNBC I generally highlight the latter, as I find them more interesting, attempting to poke holes in universally agreed upon (usually bullish) theses. Until GOOGL’s parabolic move that started prior to earnings on July 9th, the stock was considered a massive laggard, down about 5% over the last 12 months vs the S&P500 that was up about 8%. Here was a situation where the investment community was very wrong, which is why the stock played such quick catch up.
With AMZN investor skepticism surrounding their ability to grow sales profitably had until earlier this year caused the stock a bit of angst, as the stock had declined 30% from its prior all time high in 2014 to its early 2015 lows:
I highlight AMZN and GOOGL because combined the two companies have a market capitalization of that of AAPL, or about three quarters of a trillion dollars. The recent gains constitute serious capital commitment. These are not short squeezes. FTNT and NFLX feel more like short squeezes. But regardless, the dollar amounts of the latter are inconsequential in the grand scheme of things. All parabolic moves are not created equal. The rallies in AMZN and GOOGL signal one of two things, either these stocks are outliers and the moves represent a last dash for cash for under-performing funds that have been underweight. Or the tech rally that somehow masked underlying weakness in semis, hardware, enterprise software, 3d, internet services etc etc is still in full bloom and other big cap tech stocks (like AAPL’s consolidation) are a healthy rotation and are one blowout quarter away from similar parabolic moves.