A New Dawn: Rise of the Electric Eleven
In the ongoing saga of the tech sector’s titans, we’ve witnessed the meteoric rise and fall of acronyms. From the era of FAANG to the prominence of the Magnificent Seven, and the subsequent skepticism surrounding the “Fantastic Four,” Wall Street analysts now herald a new epoch with the emergence of the “Electric Eleven.” This cohort of tech companies, handpicked for their promising growth and innovative prowess, is poised to reshape the landscape of the tech industry and captivate investors’ attention in 2024.
The Fabric of the Electric Eleven
The ensemble of the “Electric Eleven” includes industry stalwarts like Airbnb (ABNB), Alphabet (GOOG, GOOGL), Amazon (AMZN), Booking Holdings (BKNG), DoorDash (DASH), Meta Platforms (META), Netflix (NFLX), Shopify (SHOP), Spotify (SPOT), The Trade Desk (TTD), and Uber (UBER). This curated selection represents a strategic blend of companies positioned for double-digit revenue growth and margin expansion, setting them apart as beacons of potential amidst the ever-evolving tech landscape.
Among these luminaries, forecasted earnings growth paints a promising picture:
Airbnb: 66.67%
Alphabet: 27.35%
Amazon: 161.29%
Booking Holdings: 20.69%
DoorDash: 82.93%
Meta Platforms: 61.74%
Netflix: 55.90%
Shopify: 1500%
Spotify: 158.1%
The Trade Desk: -4.35%
Uber: 362.5%
Exposure Through ETFs
For investors eyeing exposure to these dynamic entities, ETFs serve as a gateway to partake in their growth trajectory. Select ETFs such as MicroSectors FANG+ ETN (FNGS), First Trust Dow Jones Internet Index Fund (FDN), Invesco NASDAQ Internet ETF (PNQI), Global X Cloud Computing ETF (CLOU), and ProShares On-Demand ETF (OND) offer an avenue to harness the potential of the “Electric Eleven” and capitalize on their anticipated prosperity.
Propelling Forces of the Electric Eleven
Mark Mahaney of Evercore ISI underscores the pivotal role of generative AI in propelling these tech pioneers forward. By leveraging this transformative technology, these digital-first companies are poised to elevate their products, processes, and ultimately, shareholder value. This strategic foresight underscores the innovative spirit that defines the essence of the “Electric Eleven,” setting the stage for a compelling narrative of growth and adaptability in the tech sphere.
Upholding Resilient Demand Trends
Bolstered by the sweeping influence of generative AI and the unwavering demand for internet services across diverse sectors, the prospects for growth remain robust. Sectors such as cloud computing, advertising, retail, mobility, and entertainment are experiencing accelerated expansion, fueled by market dynamics and industry-specific catalysts. The convergence of factors like market stabilization, easing comps, and unique industry events promises a fruitful trajectory for these visionary companies in the approaching year.
The outlook remains buoyant, with cloud revenues expected to surge in 2024, presenting ripe opportunities for key players like Google, Amazon, and Microsoft. Retail, spearheaded by entities such as Amazon, is also slated for accelerated growth, positioning these digital innovators as primary beneficiaries of the generative AI revolution, unlocking new avenues for prosperity.
