Most-popular US stocks: backing the tech rally

We reveal the hot US stocks that you’ve been buying all year, since the crash low and in the past month.

The meteoric rise of Tesla (NASDAQ:TSLA) and big gains for the likes of Amazon (NASDAQ:AMZN) and Netflix (NASDAQ:NFLX) mean many UK investors have been handsomely rewarded for diversifying into US stocks during 2020.

Their success is reflected in a remarkable 16% surge for the tech-focused Nasdaq — at a time when every other major global index has suffered from the economic fall-out of the Covid-19 pandemic. The oil, minerals and financials-focused FTSE 100 index slid 18%, for example.

Many leading US tech stocks are well insulated against the crisis, with populations more likely to make use of Apple Music, Netflix subscriptions or Microsoft products during lockdowns. The wider adoption of technology has also accelerated in a way which could not have been foreseen – and may not have been possible - without the catalyst of the pandemic.

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These trends have encouraged interactive investor customers to keep up their pursuit of the so-called FAANG stocks of Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Netflix (NASDAQ:NFLX) and Google-owner Netflix (NASDAQ:NFLX). With the addition of Microsoft (NASDAQ:MSFT), their combined valuation now accounts for over a fifth of the US stock market and more than any other stock market except China.

The first six months of the year produced big profits for backers of many of these stocks, with Amazon and Netflix shares up in the region of 70%, Microsoft 35% higher and Apple 31% stronger to keep the iPhone maker in its place as the world's most valuable company.

Support on our platform for Microsoft, Apple and Amazon has been consistent throughout the year, with this trio still among the top four most-bought US stocks in June.

Far and away the most popular stock continues to be Tesla (NASDAQ:TSLA), despite the electric vehicle maker having already surged 269% in value this year and by 500% since CEO Elon Musk wrong-footed short-sellers by reporting a surprise quarterly profit last October.

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Apart from a blip during the market sell-off in February and March, the direction of travel for shares has been very much one way. Its most recent sales figures kept up the momentum, with second-quarter deliveries of more than 90,000 vehicles well ahead of Wall Street estimates and contrasting sharply with rival auto makers suffering from pandemic disruption.

Indeed, the company has overtaken Japan’s Toyota (NYSE:TM) to become the world’s most valuable car maker and, at around $300 billion, is some five times the combined value of US giants Ford (NYSE:F) and General Motors (NYSE:GM).

And to think, it was only in January that we were asking whether the company was really worth $100 billion. The price on Monday was as high as $1,794, which compares with $330 in August 2018 when Musk posted an ill-judged Tweet in which he said he had secured funding to take the company private at $420 a share. Over the first six months of 2019, Tesla's price fell to $223.

Source: TradingView. Past performance is not a guide to future performance.

Critics of the company's valuation point to the fact that its production in 2019 was a mere 5% of the German car giant Volkswagen's (XETRA:VOW) worldwide deliveries of 10.97 million vehicles in 2019. 

But with electric vehicle penetration still shy of 1% in the US and roughly 2% globally, there's plenty for Tesla and the rest to go for. The question is whether Tesla will be able to quadruple revenues by 2025 in order to justify an estimated forward price/earnings (PE) ratio that's far closer to that of Amazon, at almost 200, than Ford’s single-digit 10-year historical average.

Tesla's success has also inspired UK investors to show interest in the recent placing of shares in electric and hydrogen fuel-cell truck company Nikola Corp, which is named after inventor Nikola Tesla. Nikola was the seventh most-bought US stock on our platform in June, with the company's shares initially surging as high $80 before settling back at $55.30 on Monday.

Another newcomer for our most-bought lists in 2020 has been Zoom Video Communications (NASDAQ:ZM).

Interest in the conferencing tool remains strong despite the easing of lockdown restrictions, with Zoom our sixth most-popular US stock last month and fifth across the year-to-date. Its use for purposes ranging from work calls to family quizzes has been reflected in its share price, with Zoom outpacing Tesla after a rise of more than 300% so far in 2020.

There are 12 Nasdaq companies up 1,000% or more in 2020 so far, with biotech Novavax (NASDAQ:NVAX) among them after receiving $1.6 billion in coronavirus vaccine funding from the US government.

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Among more traditional Wall Street stocks, plenty of investors have turned to the ‘Sage of Omaha’ in these turbulent times, with Warren Buffett's Berkshire Hathaway (NYSE:BRK.B) the tenth most traded stock up until last week.

But there's little sign that interactive investor customers think that banks such as Wells Fargo (NYSE:WFC), Citigroup (NYSE:C) or Bank of America (NYSE:BAC) now represent good value after their pummelling this year. At 24th, JPMorgan Chase (NYSE:JPM) was the highest ranked stock on our list in June. This highlights fears of more economic pain to come despite record levels of stimulus from the Federal Reserve and the US government.