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Cramer nods to dominant tech stocks post-pandemic

Taking some anecdotal news and some current stock activity together, some analysts are coming to the conclusion that post-pandemic economics (particularly in the equities market) is likely going to look similar to what has come before, with some amount of doubling down.

To that end, Daniel Martins at Apple Maven reports some remarks by Jim Cramer talking about how assumptions that some of our biggest tech companies would suffer from post-pandemic returns to the status quo ante may not pan out.

“When I look at the winners in the second quarter, it tends to be companies that people counted out,” Cramer said as quoted in Martins’s story. “They felt that once the pandemic was over, people would go back [to old consumption habits]. No one’s going back!”

As further ballast, Martins cites a Counterpoint study showing Apple is due to ship phones at record numbers with 100 million units ordered already this year.

Then you have the actual stock activity for Apple, where the company’s shares have rebounded to a local high of around $140’s – that’s up from the mid-$130s in mid-April, and around $120 in mid-March.

Amazon’s chart trajectory looks very similar. Amazon is up 7-8% over the past few weeks, and up something like 20% from mid-March.

So basically, what Cramer and others of his opinion might say is that there’s been no ‘return to IRL’ that would reverse some of the big gains of companies like Amazon and Apple that trade on virtual activity in some way, shape or form.

That’s especially important in the context of a stock market where the renowned FAANG group – Facebook, Amazon, Apple, Netflix, and Google account for a massive portion of the total exchange economy.

As for the future, there’s a reasonable argument to be made that extension of past gains is unrealistic.

“If we project continued outperformance equal to the historical data (annualized returns of 37.6%, 14.3% and 10.2% for FAANG, U.S. and Global respectively), in ten years FAANG stocks would account for 96% of the U.S. stock market,” writes an analyst for Fifth Set Private Wealth Management. “Do today’s investors in FAANG stocks expect them to account for virtually the entire U.S. stock market ten years from now?”

However, these stocks may very well have further to run. Do your research and make your plays based on what you see.

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