FANG stocks is acronym created by Jim Cramer, referring to four of the best-performing tech stocks, Facebook (NASDAQ: FB), Amazon (NASDAQ: AMZN), Netflix (NASDAQ: NFLX), Google (NASDAQ: GOOGL). These tech stocks are important components of NASDAQ, and are volatile, yet all four have outperformed the NASDAQ overall in 2015, and two of the four are outperforming the index so far this year.
2016 did not start well for FANG stocks. These popular mega-cap tech stocks were massively sold off at the start of 2016. First, many investors and traders are selling market positions early in January to avoid paying taxes on capital gains for prior reporting year, and then of course there was the global concern over china’s economic growth followed by a crash of oil prices, which made everything even worse. The market showed its strength however, rebound during March and April.
Two of the Fang stocks that have achieved gains from the beginning of 2016 are Facebook and Amazon. Facebook is the undisputed champion of the tech sector at the moment, with three straight quarters of fast growth as more active users bring more ad sales, and clever use of the mobile platform. Shares of the popular social media company have increase in value by more than 14% since the beginning of the year.
Amazon, despite a surprisingly disappointing 2015 4th quarter, has rebounded fully to all-time highs after an impressive first quarter of 2016. The giant online retailer and internet services company has announcement recently that it is creating a new ad supported video service designed to compete against the giant that is YouTube. Shares of Amazon surged more than 5% in two days after the announcement reaching new all-time highs. Investors are clearly excited for more ad revenue opportunity. Shares of Amazon are up more than more than 5% since the beginning of the
Speaking of YouTube. The video service has been a significant revenue driver for Alphabet, Google’s parent company. Yet, Q1 2016 has been a disappointment as investors had expected more. The company missed analysts’ earnings estimates by as much as $0.46 per share. The stock plunged sharply as a result. One of the major worries investors have regarding Alphabet is the company’s unconventional spending on questionable projects like self-driving cars, life extension bioscience, and strange highly innovative robots. All that sounds cool, but from the investors’ stand point, it is an unnecessary expense that is unlikely lead to increase in profits any time soon. Still, shares of Alphabet have increased in value more than 30% in one year.
Netflix is the underperformer among the FANG stocks at the moment. The stock is down 21% since the beginning of the year. The video streaming company is spending big money to fuel its ambitious international expansion plans, and also on original content.
Despite the disappointing performance of Netflix lately, FANG stocks remain a very attractive investing and trading opportunity in the eyes of many.