Investors need to keep an eye on certain stocks whether they own them or not. Some companies are so big and influential that they require investors to keep up to date with what is going on with them and their actions. Their influence extends so far, investors should always have them over their stocks to watch.
These are flagship stocks that can move the markets and drag the share prices of other securities with them. At a minimum, many companies are moving other stocks that operate in the same sector of the economy.
Investors should have a watchlist of stocks that they regularly monitor, especially in times of market volatility and uncertainty. You can bet that professional Wall Street traders have an active list of stocks that they watch like hawks for any major price movement. Here are five important actions to watch out for right now and why.
Important stocks to watch: Amazon (AMZN)
Online retailer Amazon is undergoing the biggest management change in its history. For the first time since the company was founded in 1994, Amazon has a new CEO. Jeff Bezos, the richest person in the world with an estimated net worth of $ 214 billion, has been the head of Amazon since the company was founded as an online bookseller in a house in the suburbs of Seattle.
On July 5, Bezos handed over the CEO job to Andy Jassy, ââa 53-year-old Harvard graduate who previously made Amazon Web Services a formidable player in cloud computing.
Can Jassy continue to grow Amazon at a terrific rate? And will the online retailer experience a slowdown as the economy reopens and consumers return to shopping malls? These are the two big questions Wall Street wants to answer as the transition to new leadership occurs.
Amazon is also facing political headwinds as the Biden administration and lawmakers in Washington, DC seek antitrust lawsuits against Amazon and other dominant tech companies.
Despite the changes underway, AMZN stock recently rose and rose 4.4% in the past month to $ 3,659 per share.
Is the meme stock craze over? Not if video game retailer GameStop is still an indicator for stocks of struggling companies investors are pushing to unrealistic heights.
Between July 15 and July 21, GME stock rose 11% and regained a price of $ 185 per share. While the stock is down 60% from its all-time high of $ 483 reached in January of this year, the stock price continues to fluctuate wildly as investors raise it and then lower it again. Over the past month, the GameStop share price has hit $ 220 and as low as $ 160.
Beyond the continued volatility of its share price, GameStop has undergone notable changes as a business. GameStop named Ryan Cohen, who founded and succeeded with online pet retailer soft (NYSE:CHWY) as chairman and issued new shares to raise capital and repay all of its debt.
The company currently has approximately $ 750 million in cash, which it plans to use to fund a turnaround strategy that will allow it to move its business online and close its physical retail stores. Wall Street is looking to see if GameStop can succeed.
Important stocks to watch out for: Alphabet (GOOG, GOOGL)
Like Amazon, online search giant Google is under an antitrust microscope, and not just in the United States, Google’s parent company Alphabet is facing antitrust actions around the world.
The company was recently fined $ 592 million by the French government for anti-competitive practices. More specifically, France has challenged the way Google pays publishers for the reuse of their news and media content. Google is also waging antitrust battles in the UK, Australia and Russia, to name a few of the larger countries.
In the United States, Google is defending itself against accusations from 36 states that it is illegally stifling competition and protecting its dominance in online search and advertising. States have filed antitrust lawsuits against Alphabet over how it operates the Google Play app store.
Can the company weather the current political storm? Wall Street appears to be taking the antitrust litigation in stride. Alphabet stock has risen 52% so far this year and rose 8% last month to $ 2,660 for GOOGL stock alone.
E-commerce and tech giant Alibaba is widely regarded as one of China’s top stocks and a proxy for Chinese stocks listed on US stock exchanges. So, Wall Street is watching Alibaba closely to see how the Chinese government’s crackdown on mega-cap tech stocks and companies listed on US indices is progressing.
Alibaba is also informative on this matter because it is the first major tech company that Beijing cracked down on. Last spring, the Chinese government imposed a record-breaking $ 3.6 billion antitrust fine on Alibaba.
Alibaba’s shares have taken a bruise since Chinese authorities turned to the company last fall. Since the start of the year, BABA stock is down 12%, and it has fallen almost 20% in the past 12 months. The company’s stock price currently stands at $ 205.
Analysts believe the stock is woefully undervalued at its current level. The median stock price target is $ 284,071, which suggests a potential gain of 39% going forward. The high stock estimate is $ 350.75.
Important stocks to watch: Netflix (NFLX)
Netflix remains the dominant streaming service. For the time being. But the Los Gatos, Calif., Based company faces increasing competition in the streaming space from Amazon, Disney (NYSE:SAY), Apple (NASDAQ:AAPL) and others.
Netflix just released its second quarter results, which show the company now has 209 million subscribers worldwide. The company added 1.54 million new subscribers in the second quarter, more than the 1.19 million subscribers expected by analysts. However, subscriptions continue to slow down.
Netflix said it plans to add 3.5 million new net subscribers in the current third quarter, which is well below the 5.46 million new subscribers Wall Street expects. This spread caused NFLX stock to fall 4% immediately after the release of second quarter results.
The company’s shares are now trading at $ 516.34, down 4.5% on the year. Industry watchers are watching closely to see if Netflix can reverse its growth trajectory with a roster of new content and a transition to video games, or if the streaming service is destined to follow the DVD player‘s path.
At the date of publication, JoÃ«l Baglole held long positions in BABA, DIS and AAPL. The opinions expressed in this article are those of the author, subject to the publication guidelines of InvestorPlace.com.
Joel Baglole has been an economic journalist for 20 years. He spent five years as a reporter on Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as for financial websites such as The Motley Fool and Investopedia.