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Tech Expert Breaks Down The FAANG's 2018 Outlook

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Tech Expert Breaks Down The FAANG's 2018 Outlook

If history repeats itself, owning the "FAANG" group into 2018 is a smart idea.

The Expert

Daniel Ives, head of technology research at GBH Insights.

The Strategy

The average return of each "FAANG" stock if bought on the final trading day in December and sold in the final trading day in January since 2012 was compiled using data analytics from Kensho and reported by CNBC as follows:

Netflix, Inc. (NASDAQ: NFLX): Up 18.55 percent.

  • Facebook Inc (NASDAQ: FB): Up 9.5 percent.
  • Google/Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL): Up 2.92 percent.
  • Amazon.com, Inc. (NASDAQ: AMZN): Up 0.73 percent.
  • Apple Inc. (NASDAQ: AAPL): Down 4.72 percent.

Netflix

Netflix has outperformed Wall Street's expectations in its December-ending quarter since 2012, which is likely the main factor to support the stock's outperformance.

"If they are successful expanding internationally, they have strong tailwinds going into 2018," Ives told CNBC. "They have built an iron fence around the consumer landscape domestically, and all signs are pointing toward the international strategy hitting the ground running."

Related Link: Pro: Forget About The FAANG Stocks, Focus On Microsoft

Facebook

Facebook has grown its user base over the years and now stands at over 2 billion users, according to CNBC. Heading into 2018, analysts continue to be positive on the social media platform's ability to engage and monetize its vast user base across its core Facebook platform through video ads and emerging platforms like Instagram.

Alphabet

The regulatory environment isn't as certain and safe it has been in prior years, but Alphabet could still take advantage of growth opportunities.

"YouTube continues to be the crown jewel from the ad point of view. People are spending 43 minutes a day [on the platform] and that is increasing into 2018," Ives told CNBC.

Amazon

Amazon's stock performance in January is somewhat of a surprise ,as the company emerges a winner from the holiday shopping season. On average, the stock has gained less than 1 percent in January, but this may be due to the fact that the impact of holiday sales isn't priced in by the end of the month.

"Prime growth remains the key jewel for Amazon going forward," Ives said. "Cross-selling around Whole Foods customers and putting up more walls/barriers around its growing Prime customer base is a major ingredient in Amazon's ability to fend off competition in 2018 and beyond." 

Apple

Apple's 2017 stock performance appears to be ending on a concerning note, as some Wall Street analysts and experts aren't optimistic about iPhone X numbers in the new year. But Apple is known to focus on the next leg of its growth. 

"What is the next magic silver bullet they will build their growth story around? The[one] that [makes] the most sense is streaming content on the video side," Ives said.

Related Link:

'No Evidence' Of iPhone X Component Cuts, Says Rosenblatt Analyst

Posted-In: Daniel Ives FAANG FANGCNBC Long Ideas Tech Media Trading Ideas Best of Benzinga

 

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