5 ETFs to Bet On Amid Tech-Driven Market Sell-Off
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jul 26 2024
0mins
Source: NASDAQ.COM
Market Volatility and Tech Sell-Off: Recent weeks have seen increased market volatility, particularly in the tech sector, with significant losses among major companies like Tesla and Alphabet, resulting in a record decline of over $750 billion in market capitalization for the "Magnificent 7" stocks. The rise in volatility is attributed to concerns over upcoming elections and potential trade policies under Donald Trump.
Hedging Strategies for Investors: To mitigate risks from market downturns, investors are encouraged to consider various ETFs designed for hedging, such as Simplify Hedged Equity ETF and Global X Nasdaq 100 Covered Call ETF, which aim to provide capital appreciation while reducing overall portfolio volatility. These funds may offer protection during turbulent market conditions but come with associated costs and may not fully shield against extreme events.
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Analyst Views on GOOGL
Wall Street analysts forecast GOOGL stock price to rise
33 Analyst Rating
26 Buy
7 Hold
0 Sell
Strong Buy
Current: 357.770
Low
305.00
Averages
374.25
High
400.00
Current: 357.770
Low
305.00
Averages
374.25
High
400.00
About GOOGL
Alphabet Inc. is a holding company. The Company's segments include Google Services, Google Cloud, and Other Bets. The Google Services segment includes products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search, and YouTube. The Google Cloud segment includes infrastructure and platform services, collaboration tools, and other services for enterprise customers. Its Other Bets segment is engaged in the sale of healthcare-related services and Internet services. Its Google Cloud provides enterprise-ready cloud services, including Google Cloud Platform and Google Workspace. Google Cloud Platform provides access to solutions such as artificial intelligence (AI) offerings, including its AI infrastructure, Vertex AI platform, and Gemini for Google Cloud; cybersecurity, and data and analytics. Google Workspace includes cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, and Meet.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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See More
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- Policy Announcement: UK Prime Minister Keir Starmer announced on Monday a ban on social media services for users under 16, impacting platforms like Snapchat, TikTok, YouTube, Instagram, Facebook, and X, marking a significant step in protecting minors.
- Global Leadership: Starmer stated that this ban will position the UK as the first country in the world to comprehensively prohibit social media services for minors, aiming to create a safer environment for children to grow up in.
- Child Protection Measures: The policy will not only include the ban but also implement broader protective measures to ensure children can enjoy a carefree childhood, reflecting the government's commitment to the mental health and safety of minors.
- Social Reactions: The introduction of this policy is likely to spark widespread discussion, particularly among the social media industry and parent groups, and is expected to have profound implications for the user base and business models of social media platforms.
See More
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- Policy Announcement: UK Prime Minister Keir Starmer announced on Monday a ban on social media services for users under 16, marking the strictest social media regulation globally.
- Scope of Platforms: The ban could include major platforms such as Snapchat, TikTok, YouTube, Instagram, Facebook, and X, potentially leading to a decline in user base for these services in the UK.
- Child Protection Measures: Starmer emphasized that the policy aims to create a safer online environment for children, helping them regain their childhood, reflecting the government's focus on youth mental health, which may inspire similar actions in other countries.
- Expected Industry Response: Social media companies may need to revise their user policies and content management strategies to comply with the new regulations, likely increasing compliance costs and impacting their operational models in the UK.
See More
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- Positive Market Reaction: The news of the agreement has triggered a global stock market rally, with U.S. stock futures surging and the Nikkei leading gains in the Asia-Pacific region, reflecting investor optimism about future economic prospects.
- International Support: Leaders from the U.K., France, Germany, and Italy issued a joint statement welcoming the agreement, viewing it as an opportunity to restore regional stability and global economic health, and expressing readiness to lift sanctions contingent on Iran's verifiable actions.
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See More
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- Tariff Threat: President Trump has warned that France must eliminate its 3% tech 'sales tax' or face a 100% tariff on U.S. imports of French wines and champagnes, a threat issued ahead of this week's G7 summit, indicating U.S. dissatisfaction with France's tax policies.
- Tax Background: The digital services tax, approved by French lawmakers in 2019, imposes a 3% levy on gross revenues generated in France by large tech companies, primarily targeting U.S. giants like Amazon, Meta, and Alphabet, reflecting France's assertion of tax sovereignty in the digital economy.
- Economic Impact: French wine exports to the U.S. amount to about $2 billion annually, representing one-fifth of the French wine industry's total global sales, and Trump's tariff threat could significantly harm the French economy, especially amid the current global economic recovery.
- International Relations Strain: Trump's remarks not only escalate trade tensions between the U.S. and France but may also affect the atmosphere at the G7 summit, potentially influencing the direction of international trade policies, particularly in the realm of digital economy cooperation.
See More
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- Strong Market Demand: Despite being priced at over 90 times its 2025 revenue and posting a $4.9 billion net loss, SpaceX's IPO was oversubscribed, with retail investors reportedly submitting over $70 billion in orders, reflecting enthusiasm for the space and AI sectors.
- Surge in AI Spending: The four largest tech companies are projected to increase capital expenditures by 77% to $725 billion in 2023, and despite cash flow pressures, with Amazon's free cash flow down 95%, demand for cloud computing and data centers remains robust.
- Uncertain Future Outlook: While the demand for AI is immense, many corporate generative AI pilot projects have yet to yield measurable returns, prompting investors to carefully assess the relationship between future profitability and current high valuations.
See More
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- Record IPO: On June 12, SpaceX completed the largest initial public offering (IPO) in history, raising approximately $75 billion at a valuation of $1.75 trillion, more than double any previous stock market debut, indicating strong market confidence in its growth potential.
- Significant Stock Surge: By the closing bell, SpaceX's stock jumped 19%, elevating the company's market value above $2 trillion, reflecting investor optimism regarding its potential in the artificial intelligence sector and robust market demand.
- Surge in AI Spending: Amid SpaceX's IPO, the four largest tech companies are projected to spend about $725 billion on capital expenditures this year, a 77% increase from last year, highlighting the sustained strong demand for AI technologies despite high valuations and uncertain profitability.
- Divergent Market Outlook: While some analysts warn that the current high valuations and substantial losses may signal a market peak, others argue that the immense market demand and ongoing investments will drive future profit growth, prompting investors to carefully assess risks and opportunities.
See More
