There are lots of factors that can drive FAANG and other tech shares in 2021. The most interesting of them include developments in gaming, cybersecurity, 5G, edge computing, and data analytics.
2020 has been a difficult year that tested stocks for strength. Some have stood the test, others have not. Among those who have proved to be winners in this hard time are FAANG stocks – Facebook Inc (NASDAQ: FB), Amazon.com Inc (NASDAQ: AMZN), Apple Inc (NASDAQ: AAPL), Netflix Inc (NASDAQ: NFLX), and Google LLC (NASDAQ: GOOGL), the five most prominent and successful tech companies. During the coronavirus pandemic, they benefited from strong demand for e-commerce services and increased media consumption as a result of lockdowns and stay-at-home orders. Now it’s time to make a forecast for FAANG stocks’ performance in 2021.
FAANG in 2020
On a year-to-date basis, every FAANG stock is up. For Facebook, this gain is 33.73%, for Amazon, it makes up 75.13%. Further, Apple stock is 75.31% up year-to-date, Netflix stock has soared by 64.69%. Google shares are as much as 29.95% up this year.
All of the FAANG companies have seen big events that stimulated their growth. Firstly, all of them have expanded to the Indian market. In particular, Facebook and Google invested in Reliance Jio, Netflix launched low-cost mobile-only subscription plans, Apple launched the first online store there, and Amazon made investments in the Indian retail space. This all contributed to the growing importance of India among the FAANG group.
Further, due to the pandemic, the digital and contactless payment received a significant boost. This worked well for Apple Pay, Google Pay, and Amazon Pay that have seen strong adoption.
This year, FAANG stocks hit new record highs. The all-time high for Facebook stock was $303.91 on August 26. For Amazon, the latest record made up $3531.45 on September 2. Netflix and Apple have also hit records of $134.18 and $556.55 accordingly in September.
FAANG Stocks: Predictions for 2021
Some analysts believe that in 2021, FAANG stocks will receive a further boost. For example, CNBC’s “Mad Money” host Jim Cramer insists on these shares being the most reliable for investment. Kenny Polcari, the managing partner at Kace Capital Advisors, also believes that FAANGs will perform smoothly. However, he also notes that the tech industry looks far beyond these blue chips.
“Tech is so much bigger than the FAANG stocks. I fully expect that if the market reprices in early 2021, I would expect money to move out the FAANG names because they’ve so over-performed and move into other parts of the tech industry.”
There are lots of factors that can drive FAANG and other tech shares in 2021. According to Alex NG, master trainer and speaker at VI College, the most interesting of them include developments in gaming, cybersecurity, 5G, edge computing, and data analytics. Among the most notable companies, there are Tencent Holdings Ltd (NASDAQ: TCEHY), NetEase Inc (NASDAQ: NTES), CrowdStrike Holdings Inc (NASDAQ: CRWD), Skyworks Solution Inc (NASDAQ: SWKS), and Snowflake Inc (NASDAQ: SNOW).
As for FAANGs, these companies have always been keeping up with the times. Therefore, we can be sure that their rally will continue.