Analysts See Record Highs Ahead For These FAANG Stocks – Schaeffers Research (blog)

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Google parent Alphabet Inc (NASDAQ:GOOGL), e-commerce giant Amazon.com, Inc. (NASDAQ:AMZN), and TV streaming service Netflix, Inc. (NASDAQ:NFLX) all received bullish analyst attention today. Below, we will check in with these FAANG stocks and see how they are faring ahead of earnings season, with Netflix set to report early next week.

Alphabet Stock Breaks Back Above $1,000 Level

Earlier today, Credit Suisse raised its price target on Alphabet stock to $1,350 from $1,100 — in uncharted territory, and representing upside of about 35% to the equity’s current perch. Alphabet stock is currently up 1.6% to trade at $1,003.66, marking the first time GOOGL stock has crossed the $1,000 level since July 24. GOOGL stock is now a chip-shot from the record high of 1,008.61 it hit on June 6.

Since the Oct. 4 unveiling of the new Pixel smartphone and other Google gadgets, GOOGL has added about 7%. A short squeeze could be fueling Alphabet stock’s recent run. Short interest decreased by nearly 8% during the last two reporting periods, to 2.51 million shares, its lowest level since September 2016.

Credit Suisse Spreads the Analyst Love to Amazon Stock

Amazon also received a price-target hike from Credit Suisse, also to $1,350 from $1,100. The new target represents a 36% increase from AMZN’s current perch of $990.09, and nearly double the stock’s Nov. 14 low of $710.10. The e-commerce equity has added roughly 32% year-to-date, but the shares recently backed down from the $1,000 level — which coincides with a key market cap — in mid-September, and haven’t closed in four-digit territory since late July.

With Amazon shares among the best to own in the fourth quarter — and data from Schaeffer’s Senior Quantitative Analyst Rocky White showing triple-digit stocks tend to outperform their lower-priced peers — it might be prime time to buy calls on the FAANG stock, if past is prologue. Most near-term options traders are already in the bulls’ corner, as AMZN has a Schaeffer’s put/call open interest ratio (SOIR) of 0.88, its lowest point in 52 weeks. This means short-term options traders have never more call-skewed in the past year. 

One Analyst Sees Record Highs Ahead for Netflix Stock

Not to be outdone, Netflix received a price-target hike from Cowen and Company this morning, to $215 from $197 — in uncharted territory. While NFLX stock is currently down 0.2% to trade at $194.64, it has added 93% year-over-year and is fresh off a record high of $199.40 last Friday. Netflix will report earnings next Monday.

Despite the stock’s quest for new highs, there’s plenty of fuel left in the tank, should the lingering shorts hit the exits. Short interest represents nearly a week’s worth of pent-up buying demand, at NFLX’s average pace of trading.

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