ESS - Winning With Big Tech: The 2023 Playbook Is The 2024 Playbook
2024-02-16 15:12:17 ET
Summary
- The narrow rally trend in 2023 is expected to continue in 2024, making overweighting profitable big-tech stocks a successful strategy.
- The best intersections of quality, growth, and value in the market exist in mega-cap tech land.
- Most other stocks that are cheap face meaningful headwinds and lack the growth prospects of big tech.
I’ll get straight to the point here…
When I look at the stock market, it seems clear to me that the best intersections of quality, growth, and value in the market exist in mega-cap tech land.
I’m talking about Amazon ( AMZN ) and Alphabet ( GOOGL ), which currently sit in the bargain barrel while offering some of the strongest bottom-line growth estimates in the entire S&P 500.
Salesforce ( CRM ) and Meta Platforms ( META ) aren’t quite as cheap (relative to my personal fair value estimates); however, they’re also trading with discounts attached while offering 2024 EPS growth prospects of 17% and 34%, respectively.
These companies are huge. META has added hundreds of billions of dollars to its market cap during the last two weeks, alone. But, the cash flows being thrown off by these companies are prolific and at the end of the day, I’m happy to follow that money.
Simply put, it doesn’t bother me that they’re up so big during 2024. It doesn’t bother me that they’re up so much during the last 12 months....
Winning With Big Tech: The 2023 Playbook Is The 2024 Playbook