The Return Of The Four Horsemen Of The Nasdaq

During the early stages of the tech boom that buoyed the bull market in the ’90s, there were a group of tech stocks known as the Four Horsemen of the Nasdaq. The group included Cisco Systems (CSCO), Dell Computers, Intel (INTC), and Microsoft (MSFT). If you noticed that I didn’t bold and list the ticker symbol for Dell, that’s because the original company was taken private in 2013 and has only recently resurfaced in a new form, and as a publicly-traded company again—Dell Technologies (DELL).

I hadn’t thought about the Four Horsemen in a number of years until the last few days while I was going through some charts. First, Cisco caught my attention because it has held up relatively well during the rotation out of tech stocks. Then I saw that Intel and Microsoft were also holding up well.

This led me to put together this performance chart of the Four Horsemen. I compared the four stocks to the overall market as well as the Select Sector SPDR Technology ETF (XLK).

Since the beginning of 2021 and through the close on March 11, the S&P 500 is up 4.88%, and the tech sector ETF is up a mere 1.8%. The Four Horsemen have performed much better by most accounts. Microsoft is up 6.86% and Cisco is up 9.93%. The new version of Dell is up 20.92% and Intel is up a whopping 27.85% on a year-to-date basis.

Four Horsemen 2021.jpg

By comparison, the FANG companies are a newer grouping of tech and communication services stocks that include Facebook (FB), Amazon (AMZN), Netflix (NFLX), and Alphabet (GOOGL). With the exception of Alphabet (+19.85%), the FANG stocks have struggled since the beginning of the year. Facebook is up a meager 0.26%, while Netflix is down 3.27% and Amazon is down 4.4%.

What is the difference in the two groups? The biggest difference is that the Four Horsemen are now more developed companies and aren’t considered growth stocks anymore. That doesn’t mean they aren’t growing earnings and revenue, it’s that they are more mature companies that don’t have the high valuation indicators that the FANG stocks do. The rotation that we have seen recently is more about growth versus value rather than rotating out of tech stocks.

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