Apple Inc. was the most demanded stock last year among US equity fund managers, but this the place seems to be have been taken over by Amazon in 2015. The online retailer is up over 67% this year, and helped the most in offsetting the S&P 500 losses, says Bloomberg.
Amazon seen as safe bet
Amazon’s rise can partly be attributed to Apple’s hardships, and volatility in emerging markets. Investors now see it as a safe haven against the current financial turmoil as the firm gets 57% of its revenue from North America, so is less dependent on the rest on the world.
Nervous investors are looking to shift money from Apple, and for lack of new ideas, they’re “crowding into Amazon,” said a London-based fund manager at Miton Group, Hugh Grieves told Bloomberg. “There is also an element of fund managers with an S&P 500 benchmark feeling as though they must own these stocks or else they are at risk of chronic underperformance.”
Apple Inc. is one of the firm’s that has driven the massive rise in the S&P 500 in recent years. However, the iPhone maker has given up most of its gains in 2015 while other big names such as Exxon and Chevron have dropped sharply, accounting for 18% of the S&P 500’s losses, says the report.
A lot depends on today’s Apple event
Apple’s performance this year and the next will depend on the announcement that it will make in its event today. The firm is expected to unveil its next-gen iPhone, and updated Apple TV, along with other announcements.
Though Amazon’s rise has made it more expensive than its mega-cap Internet peers, still over 80% of analysts surveyed by Bloomberg rate it a Buy. In July, the stock jumped 24% after posting a surprise quarterly profit while the S&P 500 rose 2%.
In contrast, Apple has dropped over the rising concerns over iPhone demand in China. This year, the firms profit is expected to jump 42% while only 7% in 2016. On the other hand, analysts expect Amazon’s profit to triple this year. For 2016, its sales are expected to rise 19%, says the report.
On Tuesday, Apple Inc. shares closed up 2.78% at $112.31. Year to date, the stock is almost flat while in the last one-year, they are up over 13%. Amazon’s shares closed up 3.72% at $517.54.