In a recent interview with Nightly Business Report (NBR), ARK’s Next Generation Internet analyst James Wang discussed the bluest of blue chip tech stocks. Here are some takeaways:
1. Amazon is eating the world…in both retail and cloud
AmazonAMZN continues to be the bluest of the blue in tech stocks – by both market cap and the strength it has in it’s relative businesses. Amazon is the largest cloud provider by far, bigger than MicrosoftMSFT and GoogleGOOG combined. In terms of retail, they recently acquired Souq.com, a Middle Eastern retailer. They’re expanding their global footprint, giving them a long growth path ahead.
2. NVIDIA continues to impress
NVIDIANVDA is a name that became famous last year as it was the top performing stock of the S&P 500. If you read any major newspaper, you’ll hear about artificial intelligence (AI) being used everywhere – finance, media, tech. At its core, NVIDIA is a semiconductor company. It makes the processors behind all of the companies who need to build artificial intelligence solutions. Their chips run AI faster than existing chips, so it essentially has a monopoly in the space. We believe NVIDIA is a name that will continue to do well in 2017.
3. Don’t count IBM out
IBMIBM is not everyone’s favorite stock. Most analysts tend to be bearish on IBM. We’ve had vigorous debates about the tech giant within our firm and our conclusion is that people are too pessimistic and not giving it enough credit. Everyone is talking about AI, but IBM has the secret sauce for AI: which is data. They’ve spent about four billion dollars and acquired a number of companies that have the richest healthcare data in the world. We think once they can tap into that, they’ll build some very powerful businesses.
4. Facebook takes a page from Snapchat
SnapchatSNAP had a very exciting IPO and a lot of millennials got into it. FacebookFB, however, has taken the best feature of Snapchat: stories. These are full screen vertical videos that play back-to-back on your phone. Facebook has put that feature into every single app it owns. It started with Instagram and this week it added that feature into the big blue app, Facebook proper. This will give the company new advertising opportunities and long-term revenue growth beyond their current advertising load.
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