Interactive Investor

Most popular US shares of 2022

28th December 2022 10:01

by Graeme Evans from interactive investor

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American technology stocks have tumbled since late 2021, and many are cheaper than they have been for years. Here are the stocks that caught your eye this year.

New York 600

Tesla (NASDAQ:TSLA), Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL) were the most-bought US shares on our platform in 2022 as investors gained exposure to the Wall Street giants at significantly lower prices.

The buying came after one of the fastest monetary policy tightenings on record and a weakening economic outlook ended a decade of rapidly expanding tech valuations.

The NYSE FANG+ Index, which comprises the five core FAANG stocks - Facebook owner Meta Platforms (NASDAQ:META), Apple, Amazon, Netflix Inc (NASDAQ:NFLX) and Google (Alphabet Inc Class A (NASDAQ:GOOGL)) - plus Tesla, Snowflake (NYSE:SNOW), NVIDIA Corp (NASDAQ:NVDA), Microsoft Corp (NASDAQ:MSFT) and Advanced Micro Devices (NASDAQ:AMD), has fallen more than 40% in the year.

The Nasdaq Composite, whose all-time high of 16,200 in November 2021 was fuelled by pandemic-era monetary stimulus, neared 10,000 in October as growth stocks became much less attractive due to the diminishing value of future cash flows.

Investors typically use US markets to diversify their portfolios, both across geographies and to gain access to a world-leading technology sector. It’s also important to understand that, while many investors will have taken long positions in some of the big US tech stocks, there is healthy two-way trading in these stocks. As well as featuring among the most popular stocks to buy, Tesla, Apple, Amazon, Nvidia, Microsoft and Meta made up the list of most sold overseas stocks in 2022.

Meta has been one of the worst performers, shedding two-thirds of its value on concerns over rising costs, the advertising outlook and competition from other social media platforms.

With the shares back at levels last seen in 2016, interactive investor customers included Meta among the five most-bought Wall Street stocks on our platform in 2022.

Top of the table is…

The most popular was former trillion-dollar stock Tesla, which is now worth less than $400 billion amid a spectacular reversal of stock market fortunes for the electric car maker.

The decline included a 44% fall in December as worries mounted about deteriorating trading conditions and the distraction of chief executive Elon Musk’s Twitter ownership.

Apple shares were a relative tech sector outperformer after losing around a quarter of their value, with this new level sustaining buying interest on our platform during the year.

The seven most-bought stocks were all members of the FANG+ Index, with the others being Amazon.com, Microsoft, graphics processor Nvidia and Alphabet. Regardless of the recent loss of their growth status, these stocks will continue to matter due to their relative size and ability to generate significant amounts of cash.

The sustained interest in the sector comes after a fall in price-to-earnings ratio from 29 times to 19 times, more than the deterioration of 26% for the S&P 500 index in the year.

Even though IT shares are “cheaper” versus 2020 and 2021, UBS said recently they are not yet in “cheap” territory as the sector still traded at a 20% premium to the broader market.

UBS believes that earnings estimates for tech are still too high given elevated US inflation, declining corporate confidence and a tightening of financial conditions.

One tech company whose much reduced valuation failed to attract bargain hunting investors was Netflix, with the streaming service only in 11th place on our most bought list.

Here’s what you thought of the rest

Investors also showed much less appetite for old economy stocks, with JPMorgan Chase & Co (NYSE:JPM) the only bank in our top 50 list despite the outlook for rising interest rates.

Oil giant Exxon Mobil Corp (NYSE:XOM) only made position number 25, in contrast to BP (LSE:BP.) and Shell (LSE:SHEL) who were in the top five of the most-bought UK stocks on our platform.

Biotech Moderna Inc (NASDAQ:MRNA) also slipped down the list to 41, having been the 16th most-bought overseas stock in 2021 due to interest around the roll-out of Covid-19 vaccines. Pfizer Inc (NYSE:PFE) was in 36th place, with the diverse portfolio of the Warren Buffett-run conglomerate Berkshire Hathaway Inc Class B (NYSE:BRK.B) more popular in 12th place.

The meme stock phenomenon fuelled by US amateur investors on Reddit messaging boards has long since died down, but the profile of GameStop Corp Class A (NYSE:GME) and AMC Entertainment Holdings Inc Class A (NYSE:AMC) remains high after they reached positions of 26 and 20 on our list of most-bought overseas stocks.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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