By
Godfrey Benjamin
April 23rd, 2024
There are a number of expert speculations that show that FAANG stocks will not lead the next market cycle considering the slowing growth they are currently experiencing.
Dear readers welcome to another episode of our Coinspeaker Advent Calendar information and education series. Today, we will look at the prospects of the renowned FAANG stocks in 2023 and whether or not these stocks will be an ideal option for investors.
FAANG is the acronym for the stocks of Facebook’s parent company Meta Platforms Inc (NASDAQ: META), Amazon.com Inc (NASDAQ: AMZN), Apple Inc (NASDAQ: AAPL), Netflix Inc (NASDAQ: NFLX), and Google parent company, Alphabet Inc (NASDAQ: GOOGL). Each of these stocks is known to have dominated the technology world for the past decade, with their market capitalization amount the largest of tech stocks in the United States.
Historic Significance of FAANG Stocks
In the financial and investment landscape of Wall Street, FAANG stocks are arguably the most traded among traders and investors alike.
These stocks dominated growth and market capitalization over the past decade and they came up with bogus revenue and profits for their holders. When many stocks were battered by the emergence of the coronavirus pandemic, FAANG stocks stood as the biggest beneficiaries of the lockdowns.
With restricted movement across the board, people around the world increased their subscriptions to Netflix to gain entertainment, the time spent on Facebook grew remarkably while online retail shopping increased dramatically in favor of Amazon which dominated the eCommerce industry.
Apple also benefitted with more users using Google searches in order to catch up with the pandemic trends. All in all, these stocks recorded such growth that it is now in doubt whether they can meet up with their sky-high valuations in the coming years.
While they enjoyed the pandemic based on the opportunities it opened up across the board, FAANG stocks have also been battered by the economic strain fueled by inflation of the past year. From their all-time highs, the FAANG stocks, when combined, have lost as much as $3 trillion in their market capitalization.
Outlook for FAANG Stocks in 2023
There are a number of expert speculations that show that FAANG stocks will not lead the next market cycle considering the slowing growth they are currently experiencing.
“We think it is unlikely the FAANG will lead the next tech bull cycle,” Richard Clode, a portfolio manager at Janus Henderson Investors, said, adding that he has reduced his holdings of those stocks “very materially.” “We are at our lowest exposure to FAANG that we’ve been since the acronym was created.”
Notably, Apple has lost 20% of its shares in the year-to-date period and is changing hands at $141.70. Meta Platforms has seen a sharper slump with over 66% devaluation in its stock and Alphabet’s 36% drop reiterates how less of a market darling these stocks are at the moment.
Journeying into 2023, the plans to keep up pace with similar growth trends as they have recorded in the past years may come off as a lofty idea that may not impress investors. As such, they are bound to shed off these stocks in favor of more promising and smaller outfits within the same business segment.
In conclusion, FAANG stocks have a very bearish sentiment moving forward and investors may need to approach them with caution in 2023.
For future episodes of the Coinspeaker Advent Calendar Series, please stay tuned on this timeline.
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