The year 2019 has been a mixed affair for FAANG stocks so far. While returns from Netflix, Amazon and Alphabet have been disappointing, Apple and Facebook are witnessing an impressive run.
Negative headlines due to several macro issues, including the U.S.-China trade war and related tariffs, concerns over Brexit and Huawei ban, have been major overhangs for FAANG stocks this year. However, these factors were offset by benefits from growing cloud computing as well as an expanding e-commerce market. Infusion of AI and ML technologies in almost every solution has been driving the performance of FAANG stocks. Moreover, solid adoption of wearables and smart-connectivity solutions, including smart speakers, has been a major growth factor. Notably, overall FAANG stocks have returned 43.7% on a year-to-date basis, outperforming the S&P 500’s rally of 25.2%. Apple Best Performer, Netflix Worst Apple is currently the best-performing stock among the FAANGs to date, thanks to its Services business momentum despite iPhone-related weaknesses. The company’s expanded portfolio that now includes new Apple Watch Series 5 and streaming service Apple TV+ is a key catalyst. Meanwhile, despite the lingering issues related to user data and privacy along with the proliferation of fake news, terrorism-related content and political propaganda, Facebook’s user base continued to expand in the year. The company’s initiatives to improve privacy, transparency and authenticity of ads are likely to further boost user trust and engagement. Year-to-Date Performance
Alphabet’s growing litigation issues and intensifying competition from Facebook in the U.S. digital ad market have been overhangs on the share price movement. Nevertheless, Google’s robust mobile search and Alphabet's focus on AI, cloud and home-automation space have been major growth drivers.
Amazon disappointed despite solid Prime momentum and strengthening AWS services. Rising transportation costs related to its free one-day shipping service remain an overhang and are likely to escalate further. Moreover, a weak start to the holiday season is concerning. Netflix is currently the worst-performing stock among the FAANGs to date. Intensifying competition in the streaming market, primarily due to the entry of Disney and Apple, is expected to mar prospects for the streaming giant. Tech Stocks Outperform FAANG The technology sector’s performance has been impressive so far this year. Currently, the Technology Select Sector SPDR (XLK) is up 44.4% year to date. Here we pick six stocks that have outperformed the FAANG group on a year-to-date basis. Year-to-Date Returns- Tech Stocks versus FAANG
Moreover, these stocks have a favorable combination of a
VGM Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. Per the Zacks’ proprietary methodology, stocks with this favorable combination offer good investment opportunities. Our Picks Beijing-based Momo MOMO is a leading mobile-based social networking platform in China. Zacks Rank #1 VGM Score of B Market cap of $7.49 billion The Zacks Consensus Estimate for 2019 earnings has increased 1.8% to $2.80 per share over the past 30 days. Tempe, AZ-based Amkor Technology AMKR is one of the largest providers of semiconductor packaging and test services. Zacks Rank #1 VGM Score of B Market cap of $3.07 billion The Zacks Consensus Estimate for 2019 earnings stayed at 40 cents per share over the past 30 days. Neenah, WI-based Plexus ( PLXS Quick Quote PLXS - Free Report) is a leading provider of electronic contract manufacturing services. Zacks Rank #1 VGM Score of B Market cap of $2.30 billion The Zacks Consensus Estimate for fiscal 2020 earnings stayed at $4.09 per share over the past 30 days. San Jose, CA-based Synaptics SYNA designs and markets human interface solutions, such as touchpads for notebook computers, capacitive touch screen controllers for handsets and biometric fingerprint sensors for mobile devices. Zacks Rank #1 VGM Score of B Market cap of $2.14 billion The Zacks Consensus Estimate for fiscal 2020 earnings stayed at $4.04 per share over the past 30 days. Plano, TX-based Diodes DIOD is a manufacturer and supplier of application-specific standard products, primarily to the communications, computing, industrial, consumer electronics and automotive markets. Zacks Rank #2 VGM Score of A Market cap of $2.59 billion The consensus mark for 2019 earnings stayed at $2.90 per share over the past 30 days. Lincolnshire, IL-based CDW Corporation CDW is a leading provider of integrated information technology solutions to small, medium and large business, government, education and healthcare customers in the United States, the U.K. and Canada. Zacks Rank #2 VGM Score of B Market cap of $19.79 billion The consensus mark for 2019 earnings stayed at $5.99 per share over the past 30 days. Zacks Top 10 Stocks for 2020 In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2020? These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold.
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