Apple, Amazon and Google will Emerge as Winners

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Long-time technology analyst Gene Munster believes that big tech is on the cusp of a major shift: it is becoming a stock picker market.

The founder and Managing Partner of Loup Ventures expects FAANG’s shares, also known as Facebook, Apple, Amazon, Netflix and Google, to fail to collectively come together as they did for most of the record 2020.

“There’s going to be a performance fracture within FAANG, “Munster told CNBC’s” Trading Nation ” on Tuesday. “Think of that group of people who are Apple, Amazon and Google, and those who don’t have Netflix and Facebook.”

Munster sees the divide coming down to adaptation to the coronavirus, as well as evolution and prosperity in a post-pandemic world.

“The companies that are the ones that are ultimately going to be involved in much larger businesses,” Munster said.

He is more optimistic about Apple’s prospects, and highlights its innovation in the health and wellness space.

“It’s very simple. Cash is king, and that will eventually be pushed even higher with wearables, ” he said.

Munster speculates the new Apple Watches and AirPods will be designed to attract more health-conscious consumers. It also predicts that the 5G upgrade cycle will increase the bottom line.

“This company should earn close to cerca 6 [a share] in earnings in just a couple of years,” he noted. “Put a multiple of 35x into that, and you have a share of $ 200.”

According to Munster, it is a good time to consider buying shares. Apple shares, which had a 4-1 share split in August. 31, they have shot up 52% so far this year. But they are off 19% from the all-time high.

He sees Amazon reaping long-term benefits from its investments in logistics during the pandemic fever to shop online. In the case of Google, it is more of an innovative game independent of the virus.

“Think about what’s going on with Verily around health and Wellness, also what they’re doing with Waymo around autonomous transportation,” Munster said. “This kind of business, I think, will ultimately increase Google’s multiples in the coming months.”

Among FAANG’s shares, it is more bearish on Facebook and Netflix because it sees little innovation.

“The losers are just going to do the same things in the one [to] two years as they did in the last,” he said. “This will not satisfy investors’ need for larger, newer addressable markets, and we believe the multiples in those stories will begin to weigh in the coming months and quarters.”

Facebook is off more than 16% since its record success in August. 26, while Netflix, which received an early boost from stay-at-home investment strategies, is nearly 15% away from its high set on July 13.

“We can’t treat all the big limits [technology] the same way,” Munster said.

On Tuesday, the tech Nasdaq grabbed 185 points or 1.7% to close at 10,963. It is down 9.2% since its Sept. 2 Record, and more than 59% from its low on March 23.


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