Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money

73% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

  • Columnists

Mish Schneider Can big tech deliver big gains?

With positive earnings out for big tech companies, should investors’ appetite grow for companies like Alphabet [GOOGL], Microsoft [MSFT], and Amazon [AMZN] or should they look for more potential elsewhere?

This can be a very loaded question, as many people have favoured these companies for a long time.

As the pandemic unfolded, many new companies profited due to their innovation in this new environment.

Even companies that didn’t necessarily innovate but were already well positioned for a pandemic environment saw a large boost. Companies that helped people shop, work and recreate have been a huge focus.

With that said, large tech continues to hold up in the current market, but why buy large tech when we’ve seen even greater potential in small tech?

Let’s take MSFT, which is up around 7-8% since its past November high and 3D Systems [DDD] which has increased 450% percent since its November high.

 

 

Or, looking at AMZN, that stock has had next to no change in price since its November high.

Even Alphabet’s 16% gain since November’s highs pales in comparison to ViacomCBS [VIAC], which booked 100% gains at its peak.

When established companies such as the aforementioned are as saturated and bloated as they are, the upside potential is limited.

On the other hand, the newer and sexier, if you will, companies have lots of blue-sky potential.

How likely is it for a company like Google to double in price?

Wouldn’t you rather find new tech companies that have much greater potential than commit large amounts of money to huge companies that have limited upside?

This article was originally published on MarketGauge. With over 100 years of combined market experience, MarketGauge's experts provide strategic information to help you achieve your investing goals.

Disclaimer Past performance is not a reliable indicator of future results.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.

*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.

Continue reading for FREE

  • Includes free newsletter updates, unsubscribe anytime. Privacy policy

MarketGauge

Free ebook

Tricks of the trade: 7 interviews with the world’s top traders

Get it now

Related articles