Why Apple, Tesla Analyst Thinks Mega-Cap Underperforming Nasdaq Is 'Healthy Market Dynamic'
U.S. markets sought direction for most of Thursday before ending on a subdued note. But there could be a silver lining to this cloud, according to prominent Apple, Inc. (NASDAQ: AAPL) analyst and Loup Funds co-founder Gene Munster.
What Happened: The Nasdaq Composite Index is still up 16% from pre-COVID levels and the four mega-cap tech names - Alphabet, Inc. (NASDAQ: GOOGL) (NASDAQ: GOOG), Apple, Tesla, Inc. (NASDAQ: TSLA) and Microsoft Corporation (NASDAQ: MSFT) – are up a steeper 113%, Munster said in a tweet.
The Thesis: The analyst noted that many tech investors do not accept that the sell-off is done until these mega-caps have sold off. They get more nervous when the overall market plunges, he added.
On Thursday, the four mega-caps underperformed the broader market, the analyst pointed out.
While the Nasdaq ended little changed with a positive bias, Google, Apple, Tesla, and Microsoft lost 0.67%, 2.69%, 0.82%, and 2%, respectively.
Munster noted that at one point during Thursday's session, the Nasdaq was down 1.8% compared with a 3.5% drop for these four stocks.
"I view this market dynamic as healthy because it starts to remove the wait to buy until $MSFT, $AAPL and $TSLA blow up fear," the analyst said.