The PowerShares QQQ, which tracks the top 100 stocks in the tech-heavy Nasdaq, was up almost 2 percent in a month that saw a slight drop for the Dow Jones industrial average and the S&P 500, and a bigger, 1.6 percent, decline for the small-stock Russell 2000.
Some of the biggest gainers for the Nasdaq last month were Illumina, up 18.6 percent, Micron, up almost 13 percent, Tesla, up 11.3 percent and Apple, up 9.3 percent.
But specifically, Mahaney’s note focused on meetings with internet domain name leader GoDaddy, digital coupon company Quotient and payment processor Square – all finishing strong the last week of August.
The note identified GoDaddy’s opportunity internationally. Right now the company only has 17 million customers outside of the United States, with an estimated 465 million small- and medium-sized businesses beyond the borders. Mahaney’s conclusion, after talking to new CEO Scott Aldrich, was that “management views themselves as needing to penetrate markets now more than expand.”
The tech team at RBC also met with Square CFO Sarah Friar, and said their key takeaway was that “revenue margin trajectory looks sustainable.”
Mahaney and his colleagues also met with Marc Andreessen at venture capital giant Andreessen Horowitz to look at the Silicon Valley landscape beyond the scope of publicly traded companies.
In their note to investors, RBC cited Andreessen’s observation that in terms of private market valuations “they are not seeing the same levels of frothiness at later stage companies that they had seen historically.” That’s been a big concern for Wall Street over the years, casting doubt on the ability of some companies to provide shareholder value after going public.
The team at Andreessen Horowitz talked about some of the biggest players in the cloud market, saying Amazon Web Services, Google and Microsoft’s cloud divisions are “becoming more comparable in terms of price and product offering.” The VC firm is bullish on the entire cloud sector, predicting the market will see aggressive growth into the foreseeable future.
It’s worth noting the SKYY First Trust Cloud Computing ETF, which has about $1 billion in assets, is up 20 percent so far this year.