Tech companies are the industry titans of this generation. As of the end of the third quarter of 2016, five most-valuable companies in the world in terms of market capitalization are tech giants. Hence, a lot of analysts have focused on these stocks, monitoring every little move each tech giant makes, and forecasting the long-term business implications of those actions.
With this in mind, we have looked at some of the analysts’ prognostications made back in 2014 and checked on whether their forecasts came true or were way off. Let’s take a closer look what analysts were saying on CNBC about Tesla Motors Inc (NASDAQ:TSLA), Amazon.com, Inc. (NASDAQ:AMZN), Facebook Inc (NASDAQ:FB), and Alphabet Inc (NASDAQ:GOOGL) back in 2014.
Let’s start with Tesla Motors Inc (NASDAQ:TSLA), one of the top 10 luxury car brands in the World that is expected to revolutionize the automotive industry. In December 2014, two years after the launch of the Tesla Model S luxury sedan, Stifel Equity Research analyst Jamie Albertine set a $400 price target on the company’s stock and upgraded its recommendation to “buy.” Albertine cited the production of new cars and the anticipation for the mass-market Tesla Model 3 as catalysts for future growth. During that month, the company’s stock price slid below $200 before rallying to $222.41 before the year ended.
Unfortunately, Tesla’s stock wasn’t able to even get near $400. This year, Tesla Motors Inc (NASDAQ:TSLA) unveiled the Model 3, which has amassed 373,000 pre-orders and is expected to go into production in the second half of 2017, and bought solar energy company SolarCity for $2 billion. However, the company is already facing heated competition both current, like Nissan Motor Co Ltd (ADR) (OTCMKTS:NSANY)’s Leaf, and upcoming, like the Chevrolet Bolt from General Motors Company (NYSE:GM), which will roll out nationwide in 2017. Albertine still has a “Buy” rating on Tesla Motors Inc (NASDAQ:TSLA), but the price target is now $325.
While Tesla was getting a glowing forecast from Stifel in 2014, Amazon.com, Inc. (NASDAQ:AMZN) received some criticism from Sucharita Mulpuru-Kodali, principal retail analyst at Forrester Research. During what was a tough year for the online retailing giant, Mulpuru-Kodali expressed pessimism over the company’s flux in focus between tech and retail, while pointing out problems with growth of Amazon Prime and profitability. The company ended 2014 at $310.35 per share, plunging from as high as $408.00 on January 22.
Looking at Amazon.com, Inc. (NASDAQ:AMZN)’s current stock price of $766.90, which is actually lower compared to the all-time high of $844.36 that was registered on October 5, 2016, the analyst’s dire concerns seem to be from a distant past, now that the online retailing giant is the fourth-most valuable company in the world. Since surpassing Walmart last year as the world’s most valuable retailer, Amazon has been expanding operations seemingly at will. Just this month, Amazon.com, Inc. (NASDAQ:AMZN) rolled out its online Prime Video platform to more than 200 countries at a lower monthly subscription rate than Netflix and announced plans to launch Amazon Go, a new grocery store with no checkout counters.
Two years ago, Robert W. Baird analyst Colin Sebastian provided his opinion on the growth momentum of Facebook Inc (NASDAQ:FB) and what it means for Google, the social media giant’s main rival in terms of mobile ads. Sebastian pointed out to the massive shift to mobile platforms as fuel for Facebook’s growth, adding that the tech giant is poised to capture ad money that is diverting from TV to online, given its strong mobile ad platform. The analyst added that while Facebook Inc (NASDAQ:FB) can capture market share, it will be incremental, and that both Facebook and Google will have room to grow in terms of add revenues, especially since advertisers are not keen on shifting budgets away from the search giant. In December 2014, the analyst had an “Outperform” rating and an $80 price target for Facebook Inc (NASDAQ:FB)’s stock.
Turns out that the analyst got it right with his (albeit broad and quite obvious) forecast two years down the line. For starters, Facebook surpassed the price target, hitting $132.28 per share as of October 24, 2016. As for Google, which has since reorganized as a unit of Alphabet Inc (NASDAQ:GOOGL), the stock also reached its all-time high on October 24, at $835.74 per share. Even more telling is the advertising revenues the two companies have generated since the vaunted shift to mobile devices went into full swing in the last couple of years. Facebook earned $6.81 billion in advertising revenues in the third quarter of 2016, a staggering 58.54% year-over-year growth, on the strength of capturing 1.18 billion daily active users, while Alphabet Inc (NASDAQ:GOOGL)’s ad revenues grew from $16.78 billion in the third quarter of 2015 to $19.82 billion in the third quarter of 2016, proving once and for all that the two tech behemoths are battling over an ever-growing market share pie that makes them both winners.
However, even in the ever-positive fundamentals that tech companies has shown, it is still hard to predict how a company will fare two years down the line.
Disclosure: none
