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
Financial advisers will have access to private equity investments run by WTW for the first time as it launches a pooled fund to provide savers with access to traditionally institutional assets.
Three solutions providers – Betashares, Franklin Templeton and Russell Investments – have all launched new ETF products, including one range which uses gearing to help build wealth.
Platinum Asset Management chief executive, Jeff Peters, has shared a progress update on its newly announced turnaround strategy.
There is a role for advisers using inflation-linked bonds in portfolios, according to AXA IM, as the possibility of higher inflation necessitating another US rate hike is not out of consideration.
