Top Investments Reveal Aussies are Seeking the Next Tech Giant

Multi-asset investment platform eToro reveals Australian retail investors piled into stocks in July that continue to drive the work-from-home movement and support COVID-19 relief efforts.

Highlights from the performance of July trades on the platform include:

  • Electric vehicle manufacturer Nio Inc was Australia’s most sought after stock, as investors who missed the Tesla train saw potential in this Chinese competitor.
  • Amazon, Apple, and Microsoft benefited from the work-from-home transition and the shift from brick-and-mortar retail to online shopping.
  • Pharmaceuticals giant Moderna skyrocketed from zero trades in June to sixth place in July, as investors flocked to biotechnology companies in the race to find a vaccine for COVID-19.
Top 10 bought stocks by Australian investors on eToro in July 2020
July Rank Stock Monthly % change in trading activity June Rank
1 Nio Inc 505% 3
2 Tesla 287% 1
3 Amazon 162% 7
4 Apple 69% 2
5 Microsoft 91% 8
6 Moderna 113
7 Advanced Micro Devices 87% 12
8 Google 53% 11
9 Netflix 189% 17
10 Facebook -10% 5
Source: etoro.com

 

Analyst at eToro, Josh Gilbert, explains the popularity of these trades and why these tech giants have seen a resurgence in the last month. 

Nio Inc has experienced an incredible year to date (YTD) with its share price increasing more than 250%. With a 505% increase in trading activity, many investors are looking towards Nio Inc as an alternative to Tesla. When Tesla was first listed on the US Stock Exchange back in 2010, its share price was just $19.20. Since then, we’ve seen over a 7000% increase in its share price. We expect that many investors will be looking at Nio Inc’s current price of $13.60 as an attractive level to enter the market at. Strong production numbers from Nio Inc showed an increase of 322% from the same month last year, which comes after a challenging year for automakers. 

Nio Inc has also announced in July that its monthly order growth has never been higher. Many investors feel they may have missed the boat on Tesla but are interested to invest in the electric automotive industry and Nio Inc could be a great alternative. Nio Inc finished up 50.95% in July.

Tesla’s trading activity has also increased by 287% in July, as investors were pinned to its earnings results that were announced on 22 July. Tesla reported a fourth straight quarter of profits, which now means they can be considered for inclusion into the S&P 500 Index. Strong revenue numbers saw Tesla’s share price increase once again in July, reporting a $6 billion revenue, which was better than the $5.37 billion expected. The company also achieved better-than-expected second-quarter vehicle production and delivery numbers which helped their share price jump 28% in July. 

Facebook, Amazon and Apple all smashed through earnings expectations late in July. Amazon has benefited colossally from the work-from-home culture and the shift from retail shops to online shopping. Their revenues soared to $88 billion for the second quarter of 2020. Amazon shares rose nearly 10% in July. 

Facebook and Apple also went on to reach new record highs throughout July as they both reported better-than-expected earnings. Increased AD revenues from Facebook and increased iPhone sales for Apple sent both share prices soaring late in July. Many companies are continuing to turn to digital advertising, which is a benefit for Facebook and Apple, as they see their ‘upgrade cycle’ prevail. Facebook rose 6% in July, whilst Apple jumped 17%. 

Netflix and Alphabet (Google) also announced their earnings throughout July but both disappointed investors. Netflix reported fairly modest subscriber numbers, with investors hoping they would see a surge in users as further lockdown measures were implemented across the globe. Nevertheless, many people are continuing to invest in Netflix as it asserts itself as the main player in the online entertainment business. Competition from Disney+ hasn’t really come close to Netflix’s subscriber numbers, so do investors think Netflix will be the stand-alone entertainment provider moving forward? Google announced in July that its AD business had declined for the first time in Q2. However, retail investor sentiment still seems strong for Google with subsidiaries such as YouTube, which announced increased revenues. Many investors are focusing on the business’ cloud revenues that increased in July as Google turns its focus to develop such technologies, targeting the new work-from-home lifestyle. 

Moderna enjoyed a 27% price increase in July, as many investors flocked towards the biotechnology company as it emerged as a main player in the race to find a coronavirus vaccine. The company announced positive reactions to its testing phase, with critical stages of human clinical trials beginning in late July. The NASDAQ also reported that Moderna would be listed in the NASDAQ 100, meaning that index funds tracking the NASDAQ will start purchasing the stock. Investors have made the effort to find the company that will produce the first vaccine for the coronavirus, as we saw many traders investing in Gilead Sciences earlier this year when their clinical trials began. The company that produces the first vaccine will most likely see their share price soar and we’re seeing many retail investors diversify across a number of Biotech companies.

Advanced Micro Devices (AMD) share price jumped 47% in July as it released better-than-expected figures from the second-quarter earnings report. Interest surged for the gaming sector and home offices at the start of the year and AMD stood out as the frontrunner to provide graphic processing units for PCs and gaming consoles. The company also benefited from its rival’s, Intel, announcement that it had a setback in production of a new data chip, which sent AMD’s share price soaring even higher. Investors are keen to take advantage of the current bull run we are seeing from the technology sector, so smaller stocks like AMD have been increasingly popular. The company’s balance sheet remains strong and has plenty of growth potential, which could be why we are seeing an influx of new investment into smaller technology stocks such as AMD.

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About Josh Gilbert 

Josh Gilbert is an analyst at eToro. The eToro platform enables people to invest in the assets they want, from stocks and commodities to cryptoassets.

Josh Gilbert

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