Apple and Big Tech Stocks Are at or Near Records

Apple and Big Tech Stocks Are at or Near Records

Another trading, another day of market-cap wonders for the tech’s five giants. Apple (ticker: AAPL), Amazon.com (AMZN), and Alphabet (GOOGL) were on track to set record highs at Monday’s close, before losing steam. Together, with Microsoft (MSFT) and Facebook (FB), those five stocks have a combined market valuation of $6.75 trillion. Throw in Netflix (NFLX), which is also going to set a record, and the total is a cool $7 trillion. This remarkable feat comes with all of those companies due to report June quarter financial results in the next few weeks, starting with Netflix on Thursday. No question, all of those companies are seeing benefits from the economic shutdown, in the form of more subscribers, more cloud-based computing and more online commerce. But the valuations are reaching levels that feel more than a little bubbly.   Analyst says  that “the usual suspects for a pullback in IT share prices aren’t present yet—a shift upward in the U.S. yield curve, a strong dollar, widening credit spreads.” But he adds that “the very tight correlations between the [mega-cap tech] stocks alongside rich valuations and modest overbought conditions leave little room for mistakes. The sentiment is starting to become euphoric, similar to the ‘Four Horsemen’ during the late 1990s.” During the 1999-2000 period, Darby points out, the market was similarly dominated by four stocks—Microsoft (MSFT), Cisco Systems (CSCO), Dell, and Oracle (ORCL). He sees strong similarities to that period and this one, and he notes that today’s FAANG stocks are “making a similar trajectory as previous bubbles.” You might also be in interested:

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