Nasdaq (QQQ) lost over 20% due mostly to Apple (AAPL) and Microsoft (MSFT). Both companies will
outperform the economy regardless of market conditions. The stocks both trade at a P/E in the 20 times
range.
Conservative, patient investors should look at MSFT and AAPL stocks at current levels.
Amazon (AMZN) stock on the chart flashed a “double bottom” support price (per finviz.com) recently.
Still, the internet retailer is highly sensitive to the economy. High inflation and rising interest rates are
hurting demand. Amazon hired too many staff and has a high-cost structure.
Investors are counting too much on AWS for Amazon’s valuation. The stock trades at unfavorable
valuations at this time. Consider avoiding AMZN stock for now.
Google (GOOGL) is the strongest internet platform for advertisers. Its advertising customers are unlikely
to cut their budget. Google’s YouTube faces intensifying competition with TikTok. Fortunately, the stock
fell enough to price in the declining profit margins from YouTube.
Next month, Google will split shares. The stock will look more affordable to retail investors. Increased
interest in the most powerful search engine could lift GOOG stock after the split.
In the streaming segment, Netflix (NFLX) has deep value. At a P/E in the teens, markets no longer believe
in its business model. Netflix must rethink its strategy of an ad-supported tier. Instead of a low-margin
segment, Netflix should consider cutting monthly rates. It should also cut spending levels for content.
