The S&P 500 is poised to outperform the Nasdaq Composite this year for the first time in five years, as technology stocks have lagged the overall market.
The S&P 500 has gained 28% year to date, generating a total return of 29%, including dividends. The Nasdaq Composite, 50% of which is technology stocks, has climbed 23%, producing a total return of 24%.
Amazon Struggles (Relatively)
Amazon AMZN is one stock that has had a rough year — relatively speaking anyway. It has climbed only 4% year to date.
But Morningstar analyst Dan Romanoff is still bullish, putting fair value at $4,100 and assigning the stock a wide moat. It recently traded at $3,393.
He actually cut that estimate from $4,200 after Amazon’s third-quarter earnings report, “based mainly on margin pressures arising from hiring and shipping challenges, which we think may pressure profitability in the near term and, to a lesser extent, the long term,” Romanoff wrote.
“That said, we see shares as attractive. Amazon reported third-quarter results that came in above the midpoints of its guidance range for both revenue and operating income but were still shy of investor expectations.”
Big Nasdaq Winners
Some Nasdaq stocks that soared amid the work-from-home frenzy in 2020 came back down to earth this year. That includes Zoom Video Communications ZM, which skyrocketed 401% in 2020, as video conferences were all the rage, but has slid 48% this year, as growth has slowed.
Peloton jumped 410% in 2020, as people exercised at home, but has plunged 75% this year, as sales dropped and the company cut the price on its signature bike while also lowering its forward guidance.