When the oversold markets rallied last week, Amazon (AMZN), Apple (AAPL), Alphabet (GOOG), and Amazon (AMZN) led the way. Each company has a heavy weight on the index. All of them are good long-term buys for different reasons.
Alphabet admitted in its last quarterly report that it hired too many staff. It will slow or pause hiring to control costs until revenue recovers. In the current quarter, advertising revenue will likely fall again. Corporate customers are slashing non-essential spending to adjust for sharply lower product demand. Still, the holiday season approaches. Companies unaffected by the slowdown like P&G (PG) and Johnson & Johnson (JNJ) will keep advertising.
Bears applied a weak argument against Apple. Its P/E of 24.5 times at the end of last week is relatively high. Apple earned it. At $135, the stock fell to too good a price. It has iPhones, MacBooks, and subscription sales from music and television to lean on.
Amazon is the bell weather for the e-commerce industry. Its valuations are unquestionably very high. Investors will want Amazon stock for its growing Amazon Studios business, e-commerce volume sales during the holiday, and Amazon Web Services.
Investors who missed the rally should try to get AAPL, GOOG, and AMZN stock if it dips again.
