Amazon Is a Value Stock in Topsy-Turvy New World of Investing
The death of the cheap-money era is redrawing Corporate America’s earnings map — upending a decade of Wall Street wisdom over which stocks are the bargain buys or the high fliers of tomorrow.
As Big Tech grapples with a slowdown in revenue and a new commodity cycle rages, Faang members Amazon.com Inc. and Netflix Inc. are suddenly morphing into value stocks while Exxon Mobil Corp. attains the coveted growth-equity halo.
With all bets off on the inflation-lashed economic trajectory, gone are the days when the tech mega caps easily fall into the category of fast-growing corporations while oil shares trade at cheap valuations. Now growth-fund managers, who rode the bull market by simply gorging on the tech superstars, are increasingly buying shares traditionally seen as value bets. And vice versa.
As the lines blur between two of the most popular stock investing styles, the largest index managers are far apart on classifying the likes of Amazon and Exxon. That’s making life even harder for stock managers reshuffling their holdings like never before.
Take Stephen Yiu, who amassed $1 billion in less than five years by betting on the tech boom. These days, the manager of the £735 million Blue Whale Growth Fund is trying to explain to clients why he sold off all his shares in Meta Platforms Inc. and Alphabet Inc.
“We’re now trying to tell people we’re not a tech fund, and so hopefully people will understand, but some of them still have this perception, like ‘why are you getting into energy? That’s not tech,’” Yiu said.