Are FAANG stocks still the money-making machines? Jeff Bezos’ net worth surges in 2020

  • Apr 21, 2020 AEST
  • Team Kalkine
Are FAANG stocks still the money-making machines? Jeff Bezos’ net worth surges in 2020

It would not be wrong if one says that coronavirus does not see any caste, religion, and the status of a person. COVID-19 has impacted many businesses and some big celebrities and politicians around the world.

In the business world, apart from Amazon’s founder Jeff Bezos, most of the top billionaires around the world have seen a significant decline in their net worth.

According to the latest data by Forbes, below is the list of top 10 billionaires as on 20 April 2020.

 

Source: forbes

 

The coronavirus pandemic has had a firm grip on several nations around the world, with the US having the maximum number of COVID-19 positive cases. As per the data from Johns Hopkins University, on 21 April 2020, the US had ~787k confirmed cases.

Because of the rising coronavirus cases, the stock market crashed in the initial two weeks of March 2020. A report released by Forbes shows that because of the increased COVID-19 instances, more than 225 people lost their billionaire status in March 2020.

How did FAANG stocks respond to COVID-19?

The FAANG stocks have performed significantly despite the gloomy markets with all the five tech giants generating close to or over 20% in the last month.

Facebook (NASDAQ: FB)

American social media and social networking company, Facebook has delivered a negative return of ~14.56% from 2 January 2020 till 20 April 2020. However, in the last month, the shares have delivered a return of ~21.03%. On 20 April 2020, the shares traded last at $178.24, down 0.56% from its previous close.

Apple (NASDAQ: AAPL)

Apple Inc is the manufacturer of personal computers, computer peripherals, and computer software. The shares of Apple delivered a negative return of ~7.80% from 2 January 2020 till 20 April 2020. However, in the last month, the shares have delivered a return of ~23.43%. On 20 April 2020, the shares traded last at $276.93, down 2.08% from its previous close.

Amazon (NASDAQ: AMZN)

Amazon is an online retailer that offers a wide range of products like music, books, daily needs, electronic items, personalised shopping services, web services, videos and many more. It allows web-based credit card payment as well as home delivery services.

The shares of Amazon delivered a return of ~26.11% from 2 January 2020 till 20 April 2020. In the last month, the shares have delivered a return of ~25.79%. On 20 April 2020, the shares traded last at a price of $2393.61, up 0.78% from its previous close.

Netflix Inc (NASDAQ: NFLX)

Netflix Inc is the leading streaming entertainment service company in the world with more than 167 million paid subscription in 190+ nations. 

The shares of Netflix delivered a return of ~ 32.65% from 2 January 2020 till 20 April 2020. In the last month, the shares have delivered a return of ~21.43%. On 20 April 2020, the shares traded last at a price of $437.49, up 3.44% from its previous close.

Google (NASDAQ: GOOGL)

Google is an American search engine company. The mission of the company is to handle the world ‘s information as well make it completely accessible as well as useful.

The shares of Google delivered a negative return of ~7.86% from 2 January 2020 till 20 April 2020.  However, in the last month, the shares have delivered a return of ~19.64%. On 20 April 2020, the shares traded last at a price of $1261.15, down 1.4% from its previous close.

Are FAANG Stocks still the money-making machines?

People who invested around five years back in the FAANG stocks have made substantial profits driven by the strong earnings of these companies. However, post the outbreak of COVID-19, three stocks amongst the FAANG stocks, i.e. Facebook, Apple and Google delivered a negative YTD return. Yet, an improvement is seen in their share performance in the last month. This indicates that the stocks have the potential to improve in the long run as the situation stabilises.

What made the shares of Amazon and Netflix zoom up on NASDAQ?

A recent economic research by S&P Global highlighted that the impact of coronavirus is more intense than ever expected. As per S&P Global, the global GDP is going to fall by 2.4% in 2020. The US and eurozone are expected to shrink by 5.2% and 7.3%, respectively.

In the present situation, the pandemic has brought the global economy on halt. There has been a rise in the unemployment rate.  People around the world have restricted themselves to their home. People are working from their home. Most of the activities have gone online to prevent the spread of the virus.

During this period, people have become dependent on Amazon more as compared to others. People prefer using amazon.com to purchase their household items or any essential services to keep them safe from the virus contact.

Similarly, the usage of Netflix during this period has gone up. The subscribers have also gone up in number. People are getting entertained through Netflix.

The dependency of people on Amazon and Netflix have helped the company’s share to boost on NASDAQ. This has also raised the net worth of the Amazon’s founder Jeff Bezos which had increased his net worth by US$24 billion to US$138.5 billion as on 14 April 2020 and has expanded further to reach US$144.2 billion as on 20 April 2020. He currently ranks No. 1 amongst the top billionaires around the world and leads a second richest man, Bill Gates, by a whopping ~USD40 billion.

A Glance at Jeff Bezos Journey as the Founder of Amazon:

Jeff Bezos started Amazon in 1994 out of his garage in Seattle. He is the CEO of the company and has nearly 11.2% stake in the company. After spending 25 years of his wife with his Spouse Mackenzie, the couple got divorced. Jeff Bezos transferred 25% of his stake in Amazon to his wife, which makes her amongst the richest lady in the world.

In 2018, Amazon generated US$230 billion in revenue and made a net profit of $10 billion. During the period of coronavirus crisis, the company announced that it would be providing jobs to 100k people to meet the rising demand from the people during the period.


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