Of the mega-cap names ($500 billion-plus) within the Nasdaq that carried out finest in 2020, one stood out for additionally offering excellent returns within the first quarter of 2021. Throughout a interval during which Amazon, Tesla and Apple inventory failed to remain above water, Microsoft inventory elevated its market worth by one other 7%.
The Apple Maven, often centered on shares of the Cupertino-based firm, seems at how the second Most worthy firm within the US managed to achieve such heights, whereas its friends struggled to elevate off.
Significantly better than friends
MSFT beat the efficiency of AAPL, AMZN and TSLA by no less than 10 proportion factors – see chart beneath. What is maybe most spectacular is that the outperformance got here on the heels of 40%-plus returns in 2020 and positive factors of almost 60% within the earlier yr.
Towards the S&P 500 within the first quarter of 2021, Microsoft inventory squeezed in about one proportion level of alpha (i.e. returns in extra of the benchmark). The positive factors have been even higher in comparison with the tech-rich Nasdaq index. Microsoft additionally beat the buyer discretionary and tech sectors, in addition to the FAAMG group of Massive Tech shares.
Listed here are a number of fascinating details about Microsoft inventory’s efficiency in the latest quarter:
- Day-to-day volatility reached 25% annualized, which was higher (i.e. decrease) than Apple’s 33% and Amazon’s 27%;
- The utmost peak-to-trough decline was solely 7%, within the three weeks across the finish of February, in comparison with Apple’s 19% and Amazon’s 13% drawdowns;
- On the very worst day, Microsoft noticed a drop of solely 2.9% in share worth, vs. Apple’s 4.2% and Amazon’s 3.4% declines.
The nice and the dangerous of the quarter
Beneath is a brief listing of an important macro-level and company-specific occasions that impacted Microsoft share worth within the first three months of the yr.
- Not not like its friends, Microsoft inventory carried out a lot better in January, particularly round Massive Tech’s earnings week. Buyers appeared excited in regards to the prospect of superior monetary outcomes, and the Redmond, Washington-based firm didn’t disappoint.
- Issues took a flip for the more serious in late February and early March. The rise in yields and the market’s sprint in direction of cyclical shares put a damper on Microsoft’s spectacular year-to-date run as much as that time: up greater than 10% within the first six weeks of the yr.
- Different company-specific might have derailed Microsoft shares, together with the Trade Server breach of early March. Nevertheless, the inventory stood robust, and even moved increased in direction of the tip of the quarter.
Microsoft was among the many higher tech picks within the first quarter, however will this even be true within the second interval? I requested Twitter for a little bit of assistance on this query.
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(Disclaimers: this isn’t funding recommendation. The writer could also be lengthy a number of shares talked about on this report. Additionally, the article might comprise affiliate hyperlinks. These partnerships don’t affect editorial content material. Thanks for supporting The Apple Maven)