Tech’s “Big 5” of Microsoft (MSFT),
Amazon (AMZN), Alphabet (GOOG), Facebook (FB) and Apple (AAPL) are the
darlings of the stock market. However, these stocks are not equal in terms of value, growth potential and resilience amidst an economic recession.
In particular, Apple (AAPL - Get Rating)
is somewhat of a risky investment simply because its products are
priced comparably high. Consumers are likely to pinch pennies during the
recession rather than spend for Apple’s uber-expensive tech products.
Let’s take a look at the best of the “Big 5”, shedding light on why four of these stocks are worthy of your hard-earned money.
Microsoft (MSFT - Get Rating)
Chances
are you are using a Microsoft product at this very moment. MSFT has
become ubiquitous to the point that its tech tools are a near-necessity
to conduct business, compute information and use the internet. MSFT has
an 80% market share of the software market, largely because of its
uber-popular Office 365 application suite. Furthermore, MSFT functions
as a public cloud provider, empowering businesses of all types and sizes
with a litany of platform-as-a-service (PaaS) and
infrastructure-as-a-service (Iaas) solutions.
The
POWR Ratings heap on the praise for this tech superstar: a #1 rank of
81 stocks in the Software – Application industry, A POWR Component
grades without exception and positive price returns in every single
period of time. In fact, MSFT has a 191% price return across the past
three years and a 367% price return across the past five years.
Amazon (AMZN - Get Rating)
If you are like most people, you
probably saw at least one AMZN vehicle making a delivery today. AMZN
does a little bit of everything from product sales/deliveries to grocery
store operations through Whole Foods stores, video game streaming on
Twitch and a crowdsource marketplace dubbed Mechanical Turk.
Now
that unemployment has hit 15%, there is no longer a credible threat of a
worker strike upending AMZN’s progress. The only thing that can stop
AMZN is the federal government. However, few politicians have publicly
stated a willingness to seriously consider breaking up AMZN into smaller
businesses.
AMZN should make steady progress toward the analysts’ average price target of $2,746 in the months ahead, possibly reaching the high estimate of $3,300 by year’s end.
Alphabet (GOOG - Get Rating)
When
it comes to the stock market, you simply cannot go wrong with Alphabet.
Formerly known as Google, this stock is just about flawless. Though
there is a chance the federal government will eventually force GOOGL to
break apart into smaller companies that compete against one another,
neither Donald Trump nor Joe Biden have indicated a desire to chop up
GOOGL into smaller entities.
GOOGL
does just about everything tech-related. From web searches, to software
applications, enterprise solutions, consumer content (YouTube for
example) and online ads, GOOGL has its hands in nearly every online
revenue pie.
The GOOGL POWR Ratings
are nearly perfect: an Industry Rank of #2 out of 52 Internet stocks, A
POWR Component grades across the board but for a B Peer Grade and
positive price returns across every period of time going half a decade.
In fact, GOOGL has a five-year price return of 161%.
Take a look at the analysts’ price targets and you will find an expectation of $1,493.03 per share,
meaning the stock has around 3% upside. GOOGL just might move back
toward its 52-week high of $1,530.74 by the end of the year.
Facebook (FB - Get Rating)
Who
would have thought an online platform for college students to socialize
in a digital manner would become a tech behemoth highlighted by virtual
reality tech, an online marketplace and a budding cryptocurrency? This
is the story of FB.
FB’s
portfolio of intellectual property also includes the insanely popular
Instagram platform and WhatsApp messaging system. All in all, FB has 2.6
billion monthly active users and 1.73 billion daily active users.
The
FB POWR Ratings could not be better: As in every POWR Component along
with a top-5 rank in the Internet category. The analysts’ average price
target for the stock is just under $245, meaning there is still around 3% to 5% upside to go.
Now that FB is moving toward monetizing its WhatsApp messaging technology, the stock could easily reach its 52-week high of $241.21 by the end of the summer.
