Investor demand for FAANG stocks as strong as ever during first quarter

Technology stocks were among the most traded stocks in the first quarter of the year, according to new data released by Saxo Bank.

Technology stocks were among the most traded stocks in the first quarter of the year, according to new data released by Saxo Bank, which runs an online trading platform.

In the first three months of the year, electric car manufacturer Tesla proved to be the most popular stock to buy and sell among the platform’s clients. According to Peter Garnry, head of equity strategy at Saxo Bank: “Elon Musk’s electric car company went from reaching the sky, following an incredible short squeeze, to slamming the ground in just a matter of four weeks.”

Garnry is referring to the surge in its share price during the first month and half of the year, as analysts started to mark up the prospects of the company ,which had long been a target of short sellers. From the start of January to the middle of February, the company saw its share price go up by over 100%.

While the company, like many others, came under pressure with the global spread of coronavirus, its share is still up year-to-date. That, however, may change. Garnry says: “For now, the outlook depends on Chinese production starting to recover, which might get the Tesla ball rolling again. However, Musk could end up stuck in the mud of a recession.”

Second on the list of most-traded stocks was Apple.The firm had a stonking 2019, with its share price roughly doubling. However, with both a large customer base and the bulk of its supply chains in Asia, the phone manufacturer came under significant pressure in the first quarter of 2020. Indeed, as Garnry notes, coronavirus concerns forced the company to announce as early as mid-February that it would not meet its quarterly expectations. At one point, its share price was down around 25%.

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“With the coronavirus lockdowns still ongoing, it is hard to guess whether this will trend into the second quarter as well,” says Garnry. However, it is worth noting, at the time of writing (14 April), that the stock is down roughly 5% year-to-date, a much better performance than many other companies.  

Third on the list was Microsoft. Year-to-date the stock is up roughly 7%. Garnry points to Microsoft being particularly well placed to benefit from coronavirus forcing many to work from home. He notes: “Last year, Microsoft’s cloud-based unit made an impressive 59% revenue jump. This could improve even further, as most of the world is currently working from home. Instead of Microsoft needing to push for businesses to start using their cloud technology, businesses are forced to experience them first hand in order to operate on a daily basis.

The fourth most traded stock was Danske Bank, the scandal-ridden Danish bank. However, as Garnry notes, the bank was expected start to recover this year, with its new chief executive Chris Vogelzang supposed to help re-establish the bank’s reputation. However, notes Garnry: “As with the rest of the banking sector, Covid-19 shattered that for the time being.” With its share price down 32% year-to-date, either Saxo Bank customers are dumping their holdings in the company or trying to snatch it up at a cheap price.

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Finally, the fifth most traded stock was Amazon. With the world shutting down and consumers confined to their homes, Amazon had its chance to prove itself as being at the forefront of global logistics. As Garnry notes: “Jeff Bezos’ everything store proved itself ever so resilient during the Covid-19 pandemic in the first quarter. While the rest of the market dropped double digits, Amazon left the first quarter of 2020 in the same state in which they started the year. In a time of crisis, the Seattle-based company even set out to hire an additional 100,000 employees to accommodate the many orders from quarantined customers around the globe.”

Among UK users of Saxo Bank, the most traded stocks were largely the same, with a few exceptions. Principally, Danske Bank and Amazon were not among the top five. More popular among UK investors was Anglo Mining and Lloyds Banking Group. Both are FTSE 100 companies and both suffering heavy share price drops during the crisis.

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Most traded stocks in first quarter of 2020:

ALL MARKETS

1. Tesla
2. Apple
3. Microsoft Corp
4. Danske Bank
5. Amazon
6. Advanced Micro Devices
7. Facebook
8. Boeing
9. Novo Nordisk
10. NVidia

UK

1. Tesla
2. Apple
3. Anglo American
4. Microsoft
5. Lloyds Banking Group