That means the sustained and unrelenting growth of the last few years is likely to slow, especially as many of their businesses continue to mature. We call them the TANDs: Tesla, Activision, Nvidia and Disney. **Activision Blizzard – The largest video game company in the world is poised to become even more dominant, thanks not only to popular, money-making franchises such as "Call of Duty," "Warcraft" and "Candy Crush" but also the burgeoning esports industry. That revenue only complements Activision’s high-margin video game business. **Disney – The NFL, despite reports of its imminent demise, continues to attract eyeballs, with ratings up slightly this year. The company trades at roughly 17 times earnings, a steal considering Netflix's multiples are nearly seven times as high. FAANG stocks will continue to have enormous value going forward, so investors should maintain a core position in these companies. In the meantime, TAND stocks present an opportunity to invest in the growth potential of the future giants of tech. Gerber Kawasaki clients, firm and employees own positions in Facebook, Apple, Amazon,Netflix, Google, Disney, Activision, Nvidia and Tesla. Please seek guidance from an investment advisor before making any investment.
It’s no secret that the so-called FAANG family of stocks (Facebook, Apple, Amazon, Netflix and Google) have had an outsized role in propelling the steady run-up in equities over the last decade. Their collective influence has been especially formidable this year, with the tech giants propping up the S&P while other market sectors have slumped, including autos, financials and consumer staples.
It’s clear, however, that the FAANG party could be slowing down. Collectively, the group ended the week of Oct. 22 down 4.7%. Amazon and Netflix were hit particularly hard during the latest flurry of market turmoil, both at one time having shed more than 20% in October.
While these declines may have been sudden, they were hardly surprising. And though stocks have rebounded since, the challenges facing the FAANGs remain the same: valuations are high and the headwinds numerous (i.e., the waning impact of last year’s tax cut and rising rates). That means the sustained and unrelenting growth of the last few years is likely to slow, especially as many of their businesses continue to mature.
With this in mind, another batch of tech-related companies are poised to take over the mantle from the FAANGs and collectively guide the trajectory of the markets going forward. We call them the TANDs: Tesla, Activision, Nvidia and Disney.
**Tesla – Many pundits love to hate Tesla, and Elon Musk’s social media habits and other strange behavior has, at times, provided them fodder to take a pessimistic view. Eccentricities aside, Musk has Tesla moving in the right direction. The company is seemingly no longer burning through cash, a fact punctuated by its most recent earnings report, which revealed a third-quarter profit and strong production numbers.
While Tesla has the potential to transform the auto industry, it has the capacity to do much more, with its influence extending into lithium battery technology, digital ads and the ride-share industry. Tesla isn’t cheap, and no sane investor would argue that it is. At the same time, few companies have as much upside.
**Activision Blizzard – The largest video game company in the world is poised to become even more dominant, thanks not only to popular, money-making franchises such as “Call…