Major tech stocks are reaching seemingly crazy valuations despite the doom and gloom over coronavirus and the economy.
Mainstream pundits are starting to make comparisons to the 1990s dot-com bubble.
Our tech expert, Jeff Brown, agrees that valuations have reached “nutty” levels in many cases.
But as Jeff has been showing folks in a new video presentation he put together, he’s not worried about tech stocks melting down in the near future.
Instead, he’s been laying out the case for why we’re about to see a huge melt-up in tech stocks.
In other words, a final, euphoric push of a long bull market that delivers the most explosive gains.
Today, I (Chris Lowe) will show you what it means… and how to play it. But first, it’s important you grasp just how euphoric things have gotten in tech.
Over the past 12 months, Tesla shares are up 802%. Take a look…
As regular readers know, Jeff believes Tesla has a bright future thanks to its edge over its competitors in self-driving capabilities.
But the chart above looks more like a chart of Venezuelan inflation than the stock price of one of the world’s most valuable companies.
Tesla is now worth more than the world’s next four largest automakers combined.
And on Monday, in just one trading day, Tesla’s market value shot up $51 billion to $465 billion.
To put that in perspective, it took seven years for Tesla founder and CEO Elon Musk to grow the company to be worth $51 billion.
So that’s seven years of growth in market value in a single day.
It’s the world’s largest company by market value. The combined value of all its outstanding shares is $2.1 trillion.
That’s more than the combined value of the companies listed on the Russell 2000 small-cap index. It’s an index of roughly 2,000 smaller American companies.
And despite Apple’s already gargantuan size, its shares are up 140% over the past 12 months.
But over the same time, Apple’s sales are up just 5.7%. This has left its shares trading at 8.7x sales – its highest valuation ever.
At the end of last month, Apple’s market value shot up as much as the market value of ExxonMobil (XOM) in a single day.
ExxonMobil is the world’s biggest oil and gas company. As recently as 2011, it was the world’s most valuable company.
Today, ExxonMobil is worth $168 billion. That’s how much it would take to buy all its shares.
That’s also how much Apple grew in value on July 31 alone.
With extraordinary short-term gains like these, it’s no wonder investors are getting worried that the party is nearly over.
They fear another tech crash… similar to the dot-com crash 20 years ago. And at some point, they might be right. These moves are certainly highly unusual.
We’re long-term tech bulls at the Cut. And disruptive tech is one of the profit themes we track and research for you.
Back in 2015, we got so excited about the opportunity in tech, we invited Jeff Brown, a Silicon Valley insider and early-stage investor, to be our in-house tech expert.
Since then, we’ve launched three tech-investing advisories with Jeff. We’ve also helped him build a following of more than 1.9 million for his daily tech-investing e-letter, The Bleeding Edge.
And in these pages, I’ve been keeping you up to date on Jeff’s latest ideas on 5G… blockchain… self-driving cars… artificial intelligence… and gene editing.
But even I’m flabbergasted by how fast and far tech stocks have shot up in 2020. So it’s natural to feel baffled by what’s going on in the tech sector right now.
As regular readers will know, Jeff has scored a series of stunning wins in tech stocks for his paid-up readers.
For instance, Jeff’s given readers the chance to book gains of 277%… 332%… and 432% on his recommendations.
And he has a market “script” for how the 2020 tech boom will play out. Contrary to what you might think, he believes now is an incredibly bullish time for tech investors. Jeff…
Like during the dot-com boom, many tech stocks have gotten ahead of themselves. And many tech stocks have raced out to what appear to be crazy valuations.
This won’t last forever. But it will definitely be a long run up. Just look at the dot-com boom. It started in earnest in the mid-1990s. From January 1995 to mid-1998, the tech-heavy Nasdaq rocketed 171%. But if you exited at that point, you left a ton of money on the table.
It’s of the last “melt-up” in tech stocks, at the end of the 1990s…
Folks might have thought the tech boom was over after that 171% gain between January 1995 and mid-1998.
But as you can see, tech stocks – measured here by the Nasdaq – shot up another 173% between mid-1998 and January 2000.
And today, there’s one more important reason Jeff believes another melt-up will happen – the coronavirus pandemic.
Whatever your views on the pandemic… it’s hard to deny it’s changed the way we live.
And one of the biggest changes is we’re spending a lot more time using technology. Jeff…
Tech companies have been there, waiting quietly for a catalyst to push the entire world to use phones, tablets, and computers to do everything. No task – and I mean not one – is sacred.
We order groceries online through Amazon (Whole Foods) or Instacart. We order lunch or dinner through Grubhub, Uber Eats, or DoorDash.
Need prescriptions filled? Home delivery just became a norm. And in a light-switch moment, routine healthcare visits now take place using telehealth providers. Companies will soon have subscription plans and send members kits with basic medical diagnostic equipment that anyone can use.
It’s another reason Jeff sees plenty more upside ahead for tech stocks.
If Jeff is right, there’s still a melt-up in tech stocks… and the most explosive profit phase… to come.
And although you don’t want to bet the farm… now is not time to jump ship and hide out entirely in cash or other more conversative investments.
You can pick up broad exposure to the gains ahead through the Invesco QQQ Trust (QQQ).
It’s an exchange-traded fund (ETF) that tracks the tech-heavy Nasdaq-100 Index. It will give you exposure to the biggest and best-known tech stocks in America today.
And if you want to find out which individual tech stocks and sectors will power the rally… make sure to watch the special presentation Jeff put together.
You’ll learn more about Jeff’s tech melt-up thesis. He also reveals the No. 1 tech profit opportunity on his radar today. Watch it for free here.
Regards,
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Chris Lowe
September 3, 2020
Bray, Ireland