Updated: Dec 27, 2020
According to Jack Denton is a reporter with Barron's Group in London.
Markets are stalling in the wait for a stimulus bill that could bring a rally through the holidays, and all eyes are on 2021. It’s also a big day for Tesla — its stock price at the end of Friday will determine the weighting of its shares when it joins the S&P 500 next week.
As for the year ahead, our call of the day from Wedbush analyst Daniel Ives has a whole bucket of predictions involving the biggest names in technology.
“Heading into 2021 there is clear momentum for the tech space/stocks as a number of transformational trends such as cybersecurity, cloud, 5G, e-commerce, and autonomous will be front and center for the Street,” Ives said.
On Tesla TSLA, 1.20%, Ives believes the cutting-edge car maker will find continued success with its Giga 3 factory in China, which is slated to begin deliveries of the Tesla Model Y next month, hitting the 250,000 annual delivery target ahead of expectations.
Global demand for electric vehicles should hit “a major inflection point,” reaching 6% of all automobile sales from 3% today, while Ives also expects China’s Baidu BIDU, 3.72% to enter the market through a partnership or acquisition.
Apple AAPL, -1.01% will emerge as “the clear winner” in next year’s race to dominate in 5G, and break its record for annual iPhones sold, Ives said.
Regulatory headwinds, like the antitrust suits facing tech giant Google, owned by Alphabet GOOGL, -1.03%, and social media platform Facebook FB, -0.93%, could bring fines and pressure from Washington, but no major changes to tech business models or company breakups, according to Wedbush.
On cybersecurity, Ives said the recent Solarwinds SWI, -1.73% software hack will boost spending over the long term and lead to at least 20% budget growth. He also expects consolidation in the sector with aggressive acquisitions from strategic buyers.
Ives sees Microsoft MSFT, -0.46% pulling ahead of Amazon AMZN, -1.12% in the battle of cloud services, and Uber UBER, -1.56% hitting profitability ahead of expectations of a sharp rebound in ride-sharing from commuting and travel.
In bricks and mortar, Ives believes that e-commerce will remain above 20% of total retail sales despite retail coming back post-coronavirus. Real-estate technology will jump ahead, with online markets Redfin RDFN, 0.09% and Zillow Z, -1.19% taking “material share” from traditional brokerages.
Our chart of the day, courtesy of Marshall Gittler at BDSwiss, shows just how much the U.S. current-account deficit has widened and what was expected before the report for the third quarter. The current-account deficit rose to $178.5 billion.