The List of stocks for July 7 – July 13, 2021
See historical performance
Which stocks will win in July?
These shortened trading weeks are a bit hard to gauge since I’m writing this based on only one day of trading & news sentiment.
I was expecting last week to end with a pullback before the holiday and a bounce to start this week but that didn’t really happen. The S&P500 was up for most of last week and while a few stocks boomed on Tuesday, the overall index was flat.
This break from my expectations makes me a bit more cautious and both of the videos below think that the tech rally may be slowing down soon.
In the first video they discuss how the $QQQ index, which is made up of the 100 largest, non-financial, Nasdaq stocks, has been up for 7 weeks in a row. This has happened around ~1% of the time in its history. So by week 8 (this week) or week 9 (next week), it will likely have a down week.
CNBC: Chartmaster breaks down the Big Tech rebound
It makes sense to me that this recent run up should pause or return to the average soon. It’s a bit difficult to see that downtrend last for too long though when you consider the top 10 names in the QQQ index are all pretty strong and they make up more than 56% of the index. If Apple, Amazon & Microsoft are all doing well then that’s already ~33% of the QQQ so it will be hard to keep down for the second half of the year.
However, if you want to explore further the ‘negative-outlook-for-tech’ case then this analyst from Wells Fargo continues to predict a big tech pullback later in the year. He’s been saying this for a while though.
CNBC: ‘Day of reckoning’ is ahead for high-flying tech stocks, Wells Fargo warns
So I guess tread carefully for the next couple weeks. Except. Except well, Amazon & Apple are moving up…
What sent Amazon soaring Tuesday
In a big upside move, the day that Andy Jassy takes over as CEO of Amazon ($AMZN) just so happens to coincide with the $10 billion JEDI cloud computing deal with Microsoft ($MSFT) being canceled. The project will solicit a new round of bids and possibly award spread the deal across multiple vendors so there’s a chance for Amazon to still participate.
The combination of the news pushed Amazon up almost 5% to a new all-time high and it now sits at $3675.74. Although perhaps it’s more of a news correlation rather than causation since e-commerce competitor Shopify ($SHOP) was also up 5% yesterday.
CNBC: Pentagon cancels $10 billion JEDI cloud contract that Amazon and Microsoft were fighting over
If you’d like to dig into more of the new opportunities that Amazon has going forward, you can listen to Loup Ventures Gene Munster below.
CNBC: A new era begins at Amazon
And for more discussion on the broader tech trade and the changes after the JEDI deal was canceled then you can watch this video.
CNBC: Evercore’s Mark Mahaney breaks down the tech trade as Amazon and Microsoft hit new highs
Speaking of dominant companies….
Back in July 2020, I added Sea Limited ($SE) to the list. They were already huge in gaming & e-commerce in South East Asia and moving quickly into payments & banking. The stock is up ~124% since July (compared to the S&P 500’s ~38% gain) and still going strong.
If you’d like to get more familiar with the company, you can check out a free & thorough deep dive on the company below from DJY research.
DJY Research Deep Dive: Sea Limited
Zoom has bounced back to $400
A couple months back, I commented on Twitter how I liked Zoom ($ZM) then as it had just dipped below $300. Since then, the stock has bounced back to $400 on the back of a tech rebound as well as a realization that for many companies, they won’t just be ‘dropping’ some of the tools like Zoom after the pandemic since many are embracing a hybrid work environment.
I still like Zoom here and could see it sprawling inside the enterprise. Some additional commentary from Ark Invest about Zoom’s prospects.
Twitter: Ark Invest on Hybrid Work & where software budgets will come from
Don’t worry, it’s not all tech. People still drink IRL.
Back in May, I mentioned that Constellation Brands ($STZ) was a good way to play the recovery as they own more than 100 alcohol brands & several solid summer beer brands such as Corona, Modelo and Pacífico. They were also launching a hard seltzer brand and owned 38.6% of Canopy Growth ($CGC), a cannabis company.
It seems like that prediction is coming true as they are seeing strong growth and shortages from excessive demand. Watch this interview with the CEO to learn more.
CNBC: Constellation Brands CEO: Consumer demand is at an all time high
LegalZoom pops on IPO
A name that I don’t own (but probably should) is LegalZoom ($LZ). I haven’t personally used their service but it certainly seems that legal document creation is an industry ripe for disruption.
I didn’t realize just how old the company is though – they are only 2 years younger than Google. Watching the interview also makes me wonder how much of the ‘digitizing legal’ opportunity will be claimed by LegalZoom compared to other competitors.
For example, competitors can focus on specific legal niches (like say Clerky.com for Delaware incorporation) or they can leverage AI to replace some lawyer services or even build more agreements using smart contracts on blockchains instead of simply digitizing ‘paper law’. You can watch an interview with their CEO below to see what you think.
CNBC: LegalZoom shares jump 35% in market debut; CEO sees further opportunity in online legal services
Robinhood is going to IPO
On July 1st, the company filed to go public under ticker $HOOD. As of this writing though the exact date has not been confirmed yet but it will likely be within the next month or so. I personally haven’t used the app but they were a big winner during the retail trading boom & meme stock frenzy. Although that also led to some backlash and, cough cough, lawsuits.
If you’re curious about the company’s insane growth and risks, check out this quick overview of the S-1 IPO filing. It will be interesting to watch.
MarketWatch: The 5 most eye-popping disclosures in Robinhood’s long-awaited IPO filing
More SPACs from Chamath Palihapitiya
The famous, or infamous depending on your stock news sources, the investor behind several notable SPACs last year Chamath Palihapitiya has just launched 4 new biotech-focused SPACs. He previously had SPACs that took public Virgin Galatic ($SPCE), Opendoor ($OPEN), Social Finance ($SOFI) & Clover Health ($CLOV).
Twitter: We call this Bio 2.0.
Tickers & disease focus:
$DNAA – brain & nervous system
$DNAB – cancer
$DNAC – organ-based
$DNAD – immune system
Are you going to buy any of these SPACs or not interested? Reply to this email or comment below, I would like to hear your thoughts.
See you next week eh?
-B
I believe in Win & Help Win.
SpareVentures is a tech-focused weekly roundup of the most actionable news to inform your investment decisions.
Sign up below & unsubscribe anytime. I will not sell ads nor share your information. Read why I do this for free.