Apple stock has had an impressive 2020 so far, despite a global pandemic that disrupted supply chains and shut down retail stores.
Shares have climbed 67% year-to-date, the Cupertino company’s second-best annual returns of the past decade. Apple’s performance in 2020 has been market- and peer group-beating.
Compared to the S&P 500, Apple has delivered about 50 percentage points in extra gains. The outperformance over the FAAMG ex-Apple group has also been impressive: 23 additional percentage points for the year. See graph below.
But there was one Big Tech name that managed to leave Apple behind in 2020. Hint: this was definitively the year of e-commerce and cloud adoption.
Amazon stock roars back to life
Compared to the rest of the FAAMG group and even the S&P 500, Amazon had a relatively mediocre 2019. The second half of last year was particularly disappointing, which may have set up the stock for a rebound in 2020.
The current year already looked promising for Amazon before the COVID-19 crisis. Once the pandemic hit, the Seattle-based company was well positioned to benefit from new stay-at-home dynamics.
Digital sales in general have more than doubled in the first three quarters of the year. This is a stark contrast against US retail sales that had dropped as much as 15% year-over-year, in April. As a result, Amazon’s e-commerce revenues in North America and internationally grew by 37% and 31%, respectively, in the first three quarters of the year.
But not all was about e-commerce strength. Amazon also benefited from an acceleration in cloud adoption, as businesses had to adapt quickly to a digital landscape.
For this reason, Amazon Web Services revenues climbed 30% so far in 2020. This is quite an achievement, in my opinion, considering the scale of the business: a whopping $10 billion-plus in average revenues per quarter this year – and still climbing.
All accounted for, Amazon shares shot through the roof in 2020: up 71%.
Will Amazon continue to outperform?
It is always hard to predict share price movement with much accuracy. Following such a strong 2020, it is not unreasonable to think that shares might need to catch a break as 2021 kicks off.
At the same time, it is hard to bet against the e-commerce and cloud giant. The holiday shopping season is already looking very promising for Amazon, with online sales stealing the spotlight. Beyond the short term, Amazon is likely to remain an e-commerce powerhouse, ever hungrier for world domination.
Therefore, keep an eye not only on Apple, but also on Amazon as a potential winning bet in 2021.
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