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Hot Stocks Apple, Microsoft, Nvidia Lead Lower-Risk Tech Play Near Buy Point

Hot Stocks Apple, Microsoft, Nvidia Lead Lower-Risk Tech Play Near Buy Point

Investors seeking access to hot stocks in tech, artificial intelligence and self-driving cars but are afraid of a high level of risk have several options.




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One of them is Global X Autonomous & Electric Vehicles ETF (DRIV), which marked its third anniversary in April. The $957.7 million fund tracks the Solactive Autonomous & Electric Vehicles Index. It provides access not just to EV makers, but also those involved in self-driving software, lithium batteries, and materials such as lithium and cobalt.

Consumer discretionary and information technology, just over 33% each, were the two biggest sector weights as of June 30. Materials accounted for 15%, industrials 12% and communication services 6%.

In terms of countries, the U.S. represented roughly 63%, Japan 8%, China 5% and Germany 4%. The Netherlands and Ireland were about 3% each, followed by smaller positions in Canada, South Korea, Britain, Australia and Belgium. Other countries and the cash component made up 3.5%.

Aside from Japan’s Toyota Motor (TM), General Electric (GE) and Tesla (TSLA), the top 10 holdings are all U.S. tech stocks. Together, they account for just north of 30% of the fund’s 76 holdings, and are only partially in the EV business.

Nasdaq 100 Hot Stocks Lead DRIV

The top 10 include Nasdaq 100 heavyweights Apple (AAPL), Microsoft (MSFT), Nvidia (NVDA) and Alphabet (GOOGL), as well as Intel (INTC), Cisco (CSCO) and Qualcomm (QCOM).

Apple, up 8% this year, slipped back into buy range Thursday from a 137.17 entry of a cup base. The buy range goes up to 144.03. Apple hasn’t been a big gainer this year. But investors have recently been driving the stock up ahead of the company’s July 27 earnings report. There’s also rising anticipation for Apple’s next-generation iPhone 13 series, due in September.

Microsoft stock remains slightly extended from a 263.29 buy point of a cup base. The buy range goes up to 276.45. Volume has been on the light side since the June 22 breakout. The software giant, up 25% this year, is an IBD Leaderboard and IBD Long-Term Leader stock.

Google parent Alphabet is in buy range from a 2,431.48 entry of a flat base. Shares have rallied more than 40% this year. The base is second stage, which means Google could still have room to run. Stocks often make their biggest advances out of such early-stage bases.

Nvidia stock, up over 50% this year, is well-extended from a 648.67 buy point of a cup base cleared in late May. It’s rallied more than 20% from the entry, which triggers the 20%-25% profit-taking sell rule.

Hot Stocks, Lower Risk

The Global X ETF gives investors a chance to own hot stocks like Nvidia and Microsoft without worrying if they’re out of buy range. It also offers access to scores of other top tech and auto plays.

Because the fund holds a basket of stocks, investors are exposed to much lower risk even if one, two or several holdings have a bad day.

DRIV has been building a flat base since mid-February, according to IBD MarketSmith chart analysis. It’s about 5% away from a 29.01 buy point. The ETF rallied 62% last year and was up 15% this year going into Friday. It charges a 0.68% expense ratio.

Follow Nancy Gondo on Twitter at @IBD_NGondo

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About the author

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Julia Mangels

Julia has handled various businesses throughout her career and has a deep domain knowledge. She founded Stock Market Pioneer in an attempt to bring the latest news to its readers. She is glued to the stock market most of the times and just loves being in touch with the developments in the business world.

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