The three largest S&P 500 companies by market cap — Apple, Microsoft and Alphabet — have led the markets higher this month. All have rallied more than 5% in July, at least doubling the gains for the benchmark index.
That inspired CNBC's "Trading Nation" to ask its traders which they would name the GOAT — greatest of all time — of the megacap tech trade.
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"I think we have to go with Alphabet," Joule Financial President Quint Tatro said Wednesday. "That report was absolutely outstanding, top and bottom line. Most importantly I think, it was just how far ahead the company was of analysts' expectations."
Tatro added that the company's future growth estimates look to be underestimated, and he pointed to a "stellar" balance sheet as reasons to be bullish.
But after Alphabet's 55% gain this year, Tatro said investors looking to get into the stock and other megacap names should wait for weakness.
"Maybe these [stocks] pull back a little bit. That's when you step in and buy and you look to add these to your portfolio, but chasing is not a thing to do ever," he said.
Alphabet and Microsoft hit record highs on Wednesday. Apple reached its own two weeks ago, though it has since fallen 3%.
Todd Gordon, managing director of TradingAnalysis.com, used a unique rotation model to determine which is best positioned right now. Tracking the three names against the S&P 500, Gordon found that Alphabet looks to be "showing better momentum and relative strength to that benchmark S&P."
Alphabet has well outperformed the S&P 500's 17% gain in 2021, while Apple has lagged with a 9% increase. Gordon's modeling has pushed him to consider trimming his Apple position while adding to Alphabet.
Disclosure: Joule Financial and TradingAnalysis.com hold MSFT, AAPL and GOOGL.