Hey 5-Star Trader,
Once per year, the Nasdaq (NQ) adds 100 new stocks to its index in what is called the “Nasdaq 100 Rebalance.” This year, it is happening on Dec. 20.
Among the new names that will be joining the Nasdaq include Palo Alto Networks (PANW), Airbnb (ABNB), Fortinet (FTNT), Lucid Group (LCID), Zscaler (ZS), Datadog (DDOG), and Cloudflare (NET).
I am always very excited about the Nasdaq additions. Any time a ticker gets added to a major index, it usually gives traders some great opportunity due to the hype around it. But it’s not just that… It’s the fact that these companies are growing and are being elevated to a new level.
I have long discussed my bullish stance in the cyber security industry, and I remain very bullish (despite the volatility) in this industry group. The pandemic has only intensified the rate at which cyber security has become increasingly important. I am bullish on PANW, FTNT, ZS, DDOG, and NET. I believe these companies are what we will consider the next group of ‘FAANG’** stocks.
**Note: Current FAANG stocks include Facebook, Amazon, Apple, Netflix, and Alphabet (formerly known as Google).
I have also been a proponent of ABNB since before its initial public offering (IPO). Again, the pandemic has changed people’s habits. Not only has ABNB been a great option to get out without having to be at a crowded hotel, but the housing market has also been skyrocketing with low-interest rates. Some investors are even specifically buying properties just so they can rent out their very own AirBnBs. While the wealthy may use these as a place to invest and try to beat inflation, it still helps when more properties come available at ABNB. This is a trend I believe will continue.
As for LCID, shockingly despite my love of TSLA and electric vehicles, I still haven’t jumped on the LCID bandwagon. I often tell people, “If you want to buy it, go for it,” but don’t do it based on any type of actual analysis. This thing is a meme stock in my opinion and I only tend to trade it when there is high momentum and hype, but I’m not a buyer of the stock.
Only time will tell how these new additions will perform, but I’m excited to see them in action!