Stock market crash: I’m hunting giants for future gains!

Hand flipping wooden cubes for change wording" Panic " to " Calm".

After terrific returns from global stock markets in 2019-21, I became concerned about the risks of a stock market crash. Thus, in late 2021, I repeatedly warned that shares — and US tech stocks in particular — were priced pretty close to perfection. Also, I frequently wrote that it might not take much to burst this ‘bubble of everything’.

Stock market crashes fade away

Now that my gloomy prediction has proved accurate, I feel no better. After all, trillions of dollars of global wealth has been destroyed in this bonfire of asset prices. Furthermore, my family wealth has taken a beating, because — outside of our family home — the vast majority of our capital is invested in stocks and shares. Hence, this stock market crash has hurt me, but nowhere near as hard as those investors with much riskier portfolios.

Then again, I know from long experience that stock market crashes come and go. I’ve witnessed the 1987, 2000-03, 2007-09 and 2020 bear markets and lived to tell the tale. And I’ve learnt that what’s important is not to panic when others are losing their heads by selling and rushing to the exits.

Hunting giants for fallen angels

One sector I’ve steered well clear of since 2020-21 is US tech stocks. To be honest, I had no interest in buying ‘jam tomorrow’ tech/growth stocks that promised the earth while losing money hand over fist. However, the first wave of selling — the ‘spec tech wreck’ — has been followed by a broad meltdown in the US technology sector and a full-blown stock market crash.

To me, panicked sellers may be guilty of throwing out the baby with the bathwater. That’s why I’ve been trawling through the mega-cap tech companies in the US market, looking for bargains. My simple acronym to remember these technology behemoths is MAMATANN. And here are the eight members of this elite group:

Company Market cap ($trn) Share price 52-week high Price decline* 12-month change
Microsoft 1.90 $254.08 $349.67 -27.3% -24.1%
Apple 2.28 $140.82 $182.94 -23.0% 12.9%
Meta 0.52 $192.24 $384.33 -50.0% -38.7%
Amazon 1.09 $2,142.25 $3,773.08 -43.2% -33.7%
Tesla 0.74 $709.81 $1,243.49 -42.9% 26.0%
Alphabet 1.48 $2,237.99 $3,030.93 -26.2% -1.5%
Nvidia 0.42 $169.38 $346.47 -51.1% 20.4%
Netflix 0.08 $177.19 $700.99 -74.7% -63.7%
*Price decline from each stock’s 52-week high

Not one of these eight mega-cap stocks has avoided this year’s stock market crash. Worst hit is video-streaming service Netflix, whose share price has collapsed by almost three-quarters (-74.7%) from its 52-week high. Likewise, chipmaker Nvidia‘s stock has more than halved in value (-51.1%) from its peak, while Meta (the newly renamed Facebook) shares have also halved.

Which of these fallen angels would I buy today?

Looking at this list of losers, I see four heavyweights with $1trn-plus valuations. In order of market value, these are Apple, Microsoft, Alphabet (formerly Google) and Amazon. To be honest, I’ve long been an admirer of all four of these powerhouses — and especially now that their stock prices have slumped by between 23% and 43.2%.

For the record, all eight of these stocks are predicted to fall further when the US market opens this afternoon. Despite this, I’d be happy to buy into all four of these heavy hitters at today’s price. When this latest stock market crash is done, I hope these Titans will hit even higher heights!

The post Stock market crash: I’m hunting giants for future gains! appeared first on The Motley Fool UK.

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Cliffdarcy has no position in any of the shares mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Microsoft, and Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services, such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool, we believe that considering a diverse range of insights makes us better investors.