The year 2020, so far, has been a fabulous one for the actions of FAAMG, which represents the five big top technology companies – Facebook, Amazon AMZN, Apple Google AAPL, Microsoft and Alphabet. Collectively, the FAAMG represents 20.5% of the share of the S&P 500 index.
The new acronym invented by Goldman Sachs is a change from FAANG, in which Netflix NFLX was replaced by Microsoft due to its relatively smaller market capitalization. FAAMG can be used interchangeably with GAFAM.
With a gain so far (YTD) of 81.2%, Apple is currently the best performing share among the FAAMG, followed by Amazon 73.5%. Microsoft, Facebook and Alphabet accumulated 43.5%, 30.1% and 28.4%, respectively, also surpassing the S&P 500, which has increased by 18.8% so far.
The group has benefited from increased demand for e-commerce services and increased media consumption, as people are largely confined to their homes due to blockages, shelter guidelines and social distancing measures due to the pandemic. of coronavirus. As vaccination programs take several months to reach a major part of the global population, it is likely that these factors will continue to benefit the FAAMG group in 2021 as well.
However, there are several stocks that have so far surpassed FAAMG stocks this year and are expected to continue the momentum next year as well.
5 better bets than FAAMG for 2021
Here we choose five fundamentally strong actions that are ready to provide good investment opportunities compared to the FAAMG in 2021.
adze TSLA tops our list as sales of electric vehicles (EVs) are expected to improve in the new year with an improved economy and comparatively lower interest rates. However, only next year, electric vehicle sales will actually reach 26.95 million units by 2030 out of 3.27 million units sold in 2019, marking a CAGR of 21.1%, according to a MarketsAndMarkets report.
Moreover, according to a study by Boston Consulting Group, electric vehicles should account for a third of the global automotive market by 2025 and more than 50% by 2030, easily surpassing sales of vehicles with internal combustion engines (ICE ).
Tesla is ready to take advantage of EV’s robust prospects. The company has a first-class advantage in the e-mobility space, with high-end vehicles, superior technology and software advantage. The Model 3 sedan being its emblematic vehicle, the car manufacturer has established itself as a leader in the EV segment. The ramp-up of the Model Y production continues to stimulate its top growth. Shanghai Gigafactory’s solid production levels also bode well for its future growth.
Along with the increase in revenues from the automotive industry, the company’s revenues from energy generation and storage also stimulate Tesla’s prospects. In particular, both solar and storage deployments are likely to see significant growth in the coming days, with a positive reception of Megapack and Powerwall products. A bright range of future products and aggressive expansion efforts are auspicious for Tesla.
The electric vehicle manufacturer had already seen its shares rise by 665.3% in the current period, easily surpassing carmakers Zacks – the domestic industry rally of 243.9%. Moreover, Tesla’s expected earnings growth for next year is still 58.9%. Zacks’ consensus estimate for earnings in 2021 has also risen 2% in the last 30 days to $ 3.56 per share. Tesla currently has a Zacks Rank # 1 (Strong Buy). You can see The full list of Zacks # 1 stocks today is here.
Commercial officeTTD shares rose 273.8% YTD, surpassing Zacks Internet Services’ industry gain of 34.1%. The digital advertising company benefits from the impulse to programmatically buy ads. In addition, the advent of digital content has stimulated the use of this company’s inventory in all forms of connected television (‘CTV’). Moreover, the recovery of the demand and advertising spending scenario is anticipated to feed the front line.
Clearly, spending on digital advertising has surpassed traditional media purchases last year. In addition, citing reports on eMarketer, WNIP revealed that the digital advertising market is expected to reach $ 225 billion by 2024 in the United States alone, up from nearly $ 150 billion this year. This gives The Trade Desk plenty of room for expansion, and marketers need to reach consumers beyond Google and Facebook.
Trade Desk currently has a Zacks rating of 1. The Zacks consensus estimate for earnings in 2020 is set at $ 4.44 per share, being revised up 5% in 30 days. For 2021, the consensus mark for earnings has moved 2% north to $ 4.58 per share over the same period.
NVIDIA Corporation NVDA gains from the pandemic-induced wave of home-based work and home-based learning. The graphics chip maker has witnessed strong demand for GeForce desktop and notebook GPUs, which generate revenue from gaming. Moreover, an increase in demand for hyperscale is a tailwind for the company’s data center business.
In addition, the acquisition of Arm is expected to help NVIDIA deliver an end-to-end ecosystem of technology in the data center, IoT, autonomous vehicles and mobile domains. The company is now well prepared to modernize its inference technology, drivers and accelerators, using Arm’s robust architecture and chip models.
NVIDIA’s stock has risen 126.1% so far, surpassing semiconductor performance – the overall industry gain of 34.8%. Zacks’ consensus estimate for 2022 tax gains has been revised up 5 cents over the past 30 days to $ 9.71 per share. The figure indicates an increase of 18.7% from one year to another.
Zscaler ZS is based on the growing demand for cyber security solutions due to the large number of data breaches. Increasing the security demand for privileged access to digital transformation and cloud migration strategies is a key growth factor.
In addition, the company’s Edge cloud for policy enforcement, multiple leasing, proxy for SSL or TLS inspection, and zero-trust network access are robustly positioned to achieve adoption in the thriving culture of remote work.
The strength of Zacks Rank # 2’s portfolio increases its competitive advantage and helps add users. In addition, a strong vertical presence, such as banking, insurance, healthcare, the public sector, pharmaceuticals, telecommunications services and education, is another key catalyst.
Zacks’ consensus estimate for 2021 tax gains is set at 37 cents a share, revised up 27.6% in 30 days. For fiscal year 2022, the consensus mark for earnings has moved 9.6% north to 52 cents a share over the same period. Zscaler’s shares rose 344.7%, surpassing Zacks Internet Services’ 34.2% profitability so far this year.
Wayfair W shares appreciated 215.2% compared to the previous year, exceeding the gain of the e-commerce industry by 64.3%.
Strengthening the direct retail business in the United States and international regions led the growth of this company Zacks Rank # 2. In addition, an active expanding customer base has also been a tail wind. In addition, the company is investing aggressively in international regions to strengthen its footprint.
Zacks’ consensus estimate for this year’s earnings is set at $ 4.74 per share, up 8.7% in 30 days. The consensus mark for next year’s gains moved 4.6% north to $ 2.28 per share in the same time frame.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our top 10 for the entire year 2021?
These 10 are carefully chosen from over 4,000 companies covered by Zacks Rank. These are our main options for buying and holding.
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NVIDIA Corporation (NVDA): Free Stock Analysis Report
Amazon.com, Inc. (AMZN): free stock analysis report
Apple Inc. (AAPL): free stock analysis report
Netflix, Inc. (NFLX): free inventory analysis report
Tesla, Inc. (TSLA): Free Stock Analysis Report
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Zscaler, Inc. (ZS): Free stock analysis report
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