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FAANG stocks have been on a tear, shrugging escalating trade tensions between the United States and some of its key partners, especially China. Four of the FAANG stocks — Facebook , Amazon (AMZN - Free Report) , Netflix (NFLX - Free Report) and Alphabet (GOOGL - Free Report) — are scaling new highs, while Apple (AAPL - Free Report) is just 3.7% shy of its peak hit on Jun 7.
The surge is based on the fact that their businesses are largely immune to trade and tariffs based on their leadership and strength in their key industries. Netflix is the clear winner, surging about 103% this year. This is more than double the 47% rise for Amazon, the next best stock. Both Facebook and Alphabet have gained about 12.4% so far this year. Investors should note that Facebook shares have emerged strongly from the slide in the wake of data scandal.
Apple is the laggard in the group, rising by 11.5% thanks to persistent fears over the slowdown in demand for iPhones. Overall, FAANG stocks have surged 35.6% this year.
The outlook for the technology sector has been encouraging. The emergence of cutting-edge technology such as cloud computing, big data, Internet of Things, wearables, VR headsets, drones, virtual reality, and artificial intelligence as well as strong corporate earnings are acting as the key catalysts.
Additionally, the twin tailwinds of Trump’s tax reform plan and a rising interest rate scenario are pushing the stocks higher. Adding to the strength is a pickup in the economy and better job prospects that are giving a solid boost to economically sensitive growth sectors like technology, which typically perform well in a maturing economic cycle.
That said, most of the tech stocks are also following the FAANGs on the upward journey and are easily crushing them from a year-to-date look. Below we have highlighted five of these that have been outperforming and are expected to continue doing so in the near term given their solid Zacks Rank #1 (Strong Buy) or 2 (Buy).
The Zacks Rank #1 company provides mobile-based social networking platform primarily in the Peoples Republic of China. The stock saw positive earnings estimate revision of 20 cents for this year over the past month. With a market cap of $10.2 billion, it has an estimated earnings growth rate of 43.50% and a VGM Score of B. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Rank #2 company offers e-commerce services. It provides online and offline marketplaces to buy and sell goods. The company saw positive earnings estimate revision of three cents for this year over the past month with an expected growth of 18.42%. It has a market cap of $5.2 billion and a VGM Score of B.
Twitter Inc. – Up 91.6%
This Zacks Rank #1 company operates as a platform for public self-expression and conversation in real time. The company offers various products and services, including Twitter that allows users to consume, create, distribute, and discover content; and Periscope, a mobile application that enables user to broadcast and watch video live with others. It saw positive earnings estimate revision of a penny for this year over the past month and has an expected earnings growth of 70.45%. Twitter has a market cap of $33.8 billion and a VGM Score of D.
This Zacks Rank #2 company is a provider of network security appliances and Unified Threat Management network security solutions to enterprises, service providers and government entities worldwide. The stock saw positive earnings estimate revision of couple of cents for this year over the past month. With a market cap of $10.8 billion, it has an estimated earnings growth rate of 48.08% and a VGM Score of B.
This Zacks Rank #2 company provides electronic design and test solutions to communications and electronics industries internationally. The Zacks Consensus Estimate has moved up by three cents over the past month for the fiscal year ending October 2018, representing year-over-year growth of 18.18%. The stock has a market cap of $11.5 billion and a VGM Score of B.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge. With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research. It's not the one you think.
Image: Bigstock
5 Top-Ranked Tech Stocks Crushing FAANG Wave
FAANG stocks have been on a tear, shrugging escalating trade tensions between the United States and some of its key partners, especially China. Four of the FAANG stocks — Facebook , Amazon (AMZN - Free Report) , Netflix (NFLX - Free Report) and Alphabet (GOOGL - Free Report) — are scaling new highs, while Apple (AAPL - Free Report) is just 3.7% shy of its peak hit on Jun 7.
The surge is based on the fact that their businesses are largely immune to trade and tariffs based on their leadership and strength in their key industries. Netflix is the clear winner, surging about 103% this year. This is more than double the 47% rise for Amazon, the next best stock. Both Facebook and Alphabet have gained about 12.4% so far this year. Investors should note that Facebook shares have emerged strongly from the slide in the wake of data scandal.
Apple is the laggard in the group, rising by 11.5% thanks to persistent fears over the slowdown in demand for iPhones. Overall, FAANG stocks have surged 35.6% this year.
The outlook for the technology sector has been encouraging. The emergence of cutting-edge technology such as cloud computing, big data, Internet of Things, wearables, VR headsets, drones, virtual reality, and artificial intelligence as well as strong corporate earnings are acting as the key catalysts.
Additionally, the twin tailwinds of Trump’s tax reform plan and a rising interest rate scenario are pushing the stocks higher. Adding to the strength is a pickup in the economy and better job prospects that are giving a solid boost to economically sensitive growth sectors like technology, which typically perform well in a maturing economic cycle.
That said, most of the tech stocks are also following the FAANGs on the upward journey and are easily crushing them from a year-to-date look. Below we have highlighted five of these that have been outperforming and are expected to continue doing so in the near term given their solid Zacks Rank #1 (Strong Buy) or 2 (Buy).
Momo Inc. (MOMO - Free Report) – Up 117%
The Zacks Rank #1 company provides mobile-based social networking platform primarily in the Peoples Republic of China. The stock saw positive earnings estimate revision of 20 cents for this year over the past month. With a market cap of $10.2 billion, it has an estimated earnings growth rate of 43.50% and a VGM Score of B. You can see the complete list of today’s Zacks #1 Rank stocks here.
Etsy Inc. (ETSY - Free Report) – Up 114.3%
The Zacks Rank #2 company offers e-commerce services. It provides online and offline marketplaces to buy and sell goods. The company saw positive earnings estimate revision of three cents for this year over the past month with an expected growth of 18.42%. It has a market cap of $5.2 billion and a VGM Score of B.
Twitter Inc. – Up 91.6%
This Zacks Rank #1 company operates as a platform for public self-expression and conversation in real time. The company offers various products and services, including Twitter that allows users to consume, create, distribute, and discover content; and Periscope, a mobile application that enables user to broadcast and watch video live with others. It saw positive earnings estimate revision of a penny for this year over the past month and has an expected earnings growth of 70.45%. Twitter has a market cap of $33.8 billion and a VGM Score of D.
Fortinet Inc. (FTNT - Free Report) – Up 51.5%
This Zacks Rank #2 company is a provider of network security appliances and Unified Threat Management network security solutions to enterprises, service providers and government entities worldwide. The stock saw positive earnings estimate revision of couple of cents for this year over the past month. With a market cap of $10.8 billion, it has an estimated earnings growth rate of 48.08% and a VGM Score of B.
Keysight Technologies Inc. (KEYS - Free Report) – Up 46.7%
This Zacks Rank #2 company provides electronic design and test solutions to communications and electronics industries internationally. The Zacks Consensus Estimate has moved up by three cents over the past month for the fiscal year ending October 2018, representing year-over-year growth of 18.18%. The stock has a market cap of $11.5 billion and a VGM Score of B.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge. With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research. It's not the one you think.
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