Which of Tech’s Big 5 Stocks are Worthy of an Investment?

NASDAQ: AMZN | Amazon.com, Inc. News, Ratings, and Charts

AMZN – Tech’s “Big 5” of Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOG), Facebook (FB) and Apple (AAPL) are the darlings of the stock market.

 

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) 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)

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)

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 (GOOGL)

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)

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.

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AMZN shares were trading at $2,649.64 per share on Thursday afternoon, up $8.66 (+0.33%). Year-to-date, AMZN has gained 43.39%, versus a -2.65% rise in the benchmark S&P 500 index during the same period.


About the Author: Patrick Ryan


Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...


More Resources for the Stocks in this Article

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MSFTGet RatingGet RatingGet Rating

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