How are FANGs faring from COVID-19?
While some technology firms such as Zoom are seeing strong gains, the rise is not being replicated across the whole sector with mega-cap FANG stocks reporting losses since the start of the year, despite their presence in the remote working space.
Shares in both Alphabet and Apple, which run Google Hangouts and Apple FaceTime, were down 20%, while Microsoft, which owns Skype, had fallen 5% since the start of 2020.
The largest fall was seen in Facebook which fell 24% despite running Facebook Messenger and owning platforms Instagram and WhatsApp.
For Apple, the decline was due to its reliance on Chinese manufacturing which was restricted while the country was on lockdown. Alphabet and Facebook had minimal presence in China, where the market is dominated by Chinese companies Baidu and Tencent but remained caught up in the wider downturn.
While usage of Google and Facebook were likely to surge during the period, the companies still suffered from the lack of advertising revenue coming through, particularly from the travel and retail sectors.
Finally, Microsoft already announced a warning on its earning guidance with revenue from the ‘More Personal Computing’ segment (which covered Windows, devices and gaming) to be between US $10.7 billion ($17.7 billion) and $11.1 billion, a “wider than usual range” to reflect the market uncertainty.
“Although we see strong Windows demand in line with our expectations, the supply chain is returning to normal operations at a slower pace than anticipated,” it said.
“We do not expect to meet our More Personal Computing segment guidance as Windows OEM and Surface are more negatively impacted than previously anticipated,” the firm said in February.
However, the ‘N’ in FANG for Netflix was performing strongly with shares rising 10.6% over the same period as people stayed inside and used the streaming platform.
AUTHOR
Laura Dew
Recommended for you
Tribeca Investment Partners has made a distribution hire from Australian Ethical in a newly-created role focused on the national intermediary market.
Asset managers may be urged to diversify their product ranges, but investment executives have warned any M&A deal should avoid simply filling gaps and instead consider long-term value creation.
Specialist wealth platform provider Mason Stevens has become the latest target of an acquisition as it enters a binding agreement with a leading Sydney-based private equity firm.
Fund managers are entering 2025 with the most bullish sentiment since August 2021 and record high allocations to US equities, thanks to the incoming Trump administration.
