With a mcap at $970 billion, Nvidia is the world's sixth biggest company in the world following Apple, Microsoft, Saudi Aramco, Alphabet and Amazon. It is also the fifth biggest company on Wall Street.
Nvidia reported April quarter earnings and hosted a conference call on May 24. Nvidia guided for particularly strong quarter-on-quarter revenue growth in the July quarter, driven by surging AI demand.
During the COVID-19 pandemic, technology stocks, such as FAANG stocks (Facebook, Amazon, Apple, Netflix, and Google), attracted the attention of global investors due to the vast use of technology in daily business. However, technology stocks are generally considered risky stocks; hence, efficient risk management is required to construct an optimal portfolio. In this study, we investigate the volatility spillovers and dynamic conditional correlations among the daily returns of FAANG company stocks, gold, and sharia-compliant equity to construct the optimal portfolio weights and hedge ratios during the COVID-19 pandemic period by utilizing a multivariate GARCH framework. The dynamic conditional correlations reveal that both gold and sharia-compliant equities exhibit lower correlations with FAANG stocks during the COVID-19 pandemic, implying opportunities for portfolio diversification. The findings indicate that gold and shariah-compliant equity are good candidates to hedge FAANG stocks.