Companies are investing in Meta Platforms
January 13, 2022: Meta Platform’s popularity among Polish retail investors increased in Q4 2021., after the tech giant repositioned itself as a leader in the emerging metaverse sector, a connected virtual reality world that is set to revolutionize the way we shop, work and socialize. Data from global investment platform eToro on Polish investors shows that Meta has moved up from 14. ranked third in the third quarter to seventh in the final quarter of 2021.
Ben Laidler, strategist for the. global markets eToro, comments: “The growing popularity of Meta platforms among investors may be somewhat surprising, given that it lagged the market in the fourth quarter. However, there are many reasons why more DIY investors own stocks.
“First, at 23 times consensus earnings in 2022., It is the cheapest of all major U.S. technology companies, with a valuation almost in line with the overall S index&P500, looking at price-to-earnings ratio.
“Second, the company has dropped the Facebook name and tapped into the fledgling metaverse sector, which is starting to generate real excitement among many investors.
“Metaverse is a huge growth opportunity, and the fact that the Met has thrown its brand and resources behind it will be a huge catalyst for its growth. And while it’s not the only company exploring this area, it will undoubtedly be one of the major players.”.
Growth companies remain very popular with investors and dominate eToro’s list of 10 most owned stocks, despite concerns about rising inflation and higher interest rates.
The Bank of England became the first major central bank to raise rates from record lows last month, while the U.S. Federal Reserve warned investors to expect up to three rate hikes this year.
Still, at the end of the fourth quarter, Tesla maintained its leadership position as the top stock on the eToro platform, followed by Chinese rival Nio.
Tech giants Amazon (3. place in Q4), Apple (4.), Alibaba (5.), Microsoft (6.) and Alphabet (7.) all maintained their positions in the top 10 at the end of Q4.
Laidler adds: “The U.S. Federal Reserve has signaled that it is ready to raise rates three times this year. Normally one would expect investors to heed these warnings and exit growth stocks into value stocks, but our data clearly shows that this is not the case.
“Six of the ten most widely held stocks on our platform at the end of the fourth quarter were what I would call Big Tech’s ‘new defense’. In other words, companies that have dominant market positions, strong growth, high margins and strong balance sheets. While they may have high valuations, investors are starting to see them as all-weather stocks that can successfully handle whatever the Fed or the economy throws at them.
“In addition, investors are trying to get ahead of inflation, which is the highest in the U.S. in 40 years. Given that growth stocks continue to outperform the broader market, it makes sense that investors see them as the best place to keep their money right now.
Pawel Majtkowski, eToro analyst adds: “Poles investing through eToro are exactly in line with global investment trends. It’s interesting that in many studies, the picture of the Polish investor seems to be significantly different from the global investor. The Polish investor tends to have a smaller investment portfolio, focuses more on the local market and is more worried about the effects of inflation. However, when that same investor hits the eToro platform, they automatically start thinking more globally and invest similarly to those in the US or Western Europe.
The list of the most popular companies on the global and Polish market is therefore similar. So the top 5 in is the same: Tesla, Nio, Amazon, Apple and Alibaba. This group of leaders has remained virtually unchanged for several quarters.
Then there are the minor differences. Microsoft is more popular than Meta among Polish investors. This is likely a result of the overwhelming supremacy of Windows-based computers in Poland. And Alphabet, the company that owns the Google search engine (and more), is more popular than GameStop. This is due to the fact that in general meme stocks are much less popular in Poland than on the global market.
This statistic is good, because it shows that we already have the capabilities and tools to access the global stock market. And when we find ourselves in it, we are able to take advantage of the best investment opportunities. In this way we also diversify portfolios, reducing their risk.”