What Happened: Ives theorized in a note Monday that the decoupling between the United States and China would have led to Chinese companies such as Alibaba, JD.com, Inc (NASDAQ: JD), Baidu, Inc (NASDAQ: BIDU), Tencent Holdings Limited (OTC: TCEHY), and others gaining more “investor mindshare” due to a complex global backdrop.
However, the delayed Ant IPO and the “regulatory crackdown” on the Chinese tech sector have delivered a major “black eye,” as per the analyst — casting a “shadow over the space with Alibaba front and center.”
“We believe these dynamics will yet again bode well for US tech stocks as the favorable backdrop creates a ‘nirvana set up’ for FAANG names and the overall US tech sector into 2021,” wrote Ives.
Why It Matters: The analyst said that the US-China decoupling could take an altered path under Joe Biden in the White House, whose administration is likely to take a “much softer tone” in the eyes of the Street.
See Also: US Senate Passes New Regulations For Chinese Companies; Alibaba, Others Trade Down
KeyBanc Capital Markets analyst Hans Chung said recently that Pinduoduo Inc (NASDAQ: PDD) and JD.com are likely to be the primary and secondary beneficiaries of the Chinese regulatory investigation into Jack Ma-founded Alibaba.
price Action: On Monday, Facebook and Apple shares closed nearly 3.6% higher at $277 and $136.69 respectively. The same day, Amazon shares ended the regular session almost 3.5% higher at $3,283.96, while Netflix shares closed 1% higher at $519.12.
Alphabet Class A shares closed 2.3% higher at $1,773.96 and the company’s Class C shares closed 2.14% higher at $1,776.09.
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