Tesla, big tech and crypto — the most popular global stocks with Aussie investors on eToro in Q3
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‘Stagflation’ fears (high inflation + low growth) are creeping into global markets, as the post-COVID energy crunch intensifies.
But that didn’t stop Aussie investors from staying long in the world’s most prominent high-growth tech stocks, according to trading platform eToro.
The company has released its latest quarterly ‘top 10 most traded stocks’ list for September. And nine of the top 10 positions were taken up by the tech heavyweights.
While plenty of big tech was on the menu, the electric vehicle thematic is still the dominant play for Aussie investors on eToro.
Tesla topped the list for the second straight quarter, followed in second place by China-based EV play Nio Inc.
“This was perhaps unsurprising as sales of electric vehicles boomed in the first half of the year, with 2.4m sold globally – nearly three times as many as during the same period in 2020,” said Ben Laidler, eToro global market strategist.
As the EV shift continues, the number of vehicles sold in Q3 as a percentage of total vehicle sales globally rose to 7%, Laidler added.
In addition, local investors who bet on Tesla at the start of the quarter would have been rewarded with a ~16% gain, as the stock rose by around US$100 over the three-month period.
That marked a turnaround from the first six months of the year, when it fell by around 20%.
eToro analyst Josh Gilbert said the Q3 momentum was a by-product of Tesla’s Q2 trading update, which showed vehicle deliveries “were up 122 per cent year-over-year, gross margins were continuing to swell and most importantly, guidance was strong for the rest of the year”, he said.
Elsewhere, the big tech narrative held sway with Australian investors in Q3.
Apple and Amazon occupied positions 3 and 4 on the most-traded list, up from 4 and 6 in Q2, respectively.
Google parent company Alphabet also returned to the top 10 (8th), along with the NYSE-listed shares of Chinese ecommerce giant Alibaba (6th).
Shares in BABA rose to highs above US$300 in October 2020, just before co-founder Jack Ma criticised the regulatory framework for fintech companies in China.
Since that point, Ma has rarely been heard from in public while a proposed November 2020 float of BABA’s fintech lending arm in Hong Kong was swiftly pulled at the last minute.
Alibaba shares continued to struggle for traction in Q3, falling from around US$225 to less than $US150, before a small bounce off those lows in October.
Demonstrating their tolerance for risk appetite, Australian investors continued to show a preference for high-profile US games company GameStop.
GME shares famously rose from less than US$20 to around US$350 during an epic short squeeze in January. Since then it’s traded in a narrower range, and held up between US$150 to US$200 in the September quarter.
Another notable mover on this quarter’s top 10 list was Coinbase, as local investors indicated an increased willingness to go crypto adjacent.
Shares in Coinbase — American’s largest crypto exchange — closed at US$328 a share when the stock debuted on the Nasdaq in April, but has since fallen back to around US$250.
Analysing the results, Laidler said Australian investors have so far shown a willingness to look through possible changes in the low-rates environment, which typically suits high-growth tech stocks.
He noted that most of the tech heavyweights lost ground in September, as the time frame for the first interest rate hike by the US Fed was brought forward to 2022 (with more to come in 2023).
However, “the fact that growth – and in particular big tech – stocks increasingly dominate portfolios suggests two things”, he said.
“Firstly, that investors believe interest rate rises will be slow and steady; and, secondly, that they believe there is still plenty of mileage in growth stock earnings.”
“Unless the Fed takes the market by surprise and starts hiking rates quicker than expected, we believe tech and other growth stocks will continue to form the backbone of most portfolios,” Laidler said.