- The ongoing economic crisis and the bleak market sentiments have had an impact on the US markets.
- Tech Stocks, in particular, have experienced significant volatility in their respective share price.
- Facebook, Amazon, Apple, Netflix, and Google, collectively known as FAANG Stocks, are the current tech darlings of the global stock market.
- Their performance is deemed crucial in the US as it influences the broader movement of the equity markets.
The FAANG stocks or the tech darlings in the US stock market are crucial for Wall Street trading as their performance influences the broader movement of the equity markets. The FAANG stocks include five prominent American technology companies, Facebook, Apple, Amazon, Netflix, and Google. As of 28 September 2020, their combined market capitalisation is over US$5trillion.
FAANG stocks have shown much instability in the last week with the stocks recording a jump on 21 September driven by a jump in the Amazon share price over its bullish outlook. The stocks again experienced a significant decline on 23 September, only to gain back on following days. The volatile market sentiments are reflected in the crest and trough pattern of the tech stocks’ movements. The same trajectory got reflected on the benchmark indices.
Volatile stock market amid ongoing Virus Crisis
Jerome Powell, Federal Reserve Chairman requested Congress for additional financial supports to manage the impact of the ongoing crisis on 23 September 2020. Ever since the onset of the pandemic, there is enormous uncertainty in the global stock market, including the US stock market. The market volatility may continue till any medical breakthrough is achieved regarding COVID-19 virus containment that has crippled the US and world economy.
On 25 September 2020, the concerns on economic slowdown triggered a sell-off. However, technology stock rescued the trading session with S&P 500 up by 1.60%. Tech and cruise line stocks were the topmost gainers with Apple gaining 3.8%, and NVIDIA Corporation gaining 4.3%. Both these stocks were the best performers of the mega-cap tech giants on 25 September 2020.
Shedding some light on the FAANG stocks
Considering the massive weighting of FAANG stocks in the S&P 500, let's know about these five key US tech stocks.
Facebook, Inc. (NASDAQ:FB) is a popular social networking service provider and online social media company that connects people and provide them with a platform to share ideas and build communities. The company was founded in 2004 and lists more than 2 billion users through its significant and equally popular subsidiaries including WhatsApp, Instagram, and Oculus VR.
Recently, Facebook AI researchers and engineers have created a live video content which can be accessed using automatic closed captions for Workplace Live and Facebook Live. It supports six languages including English, French, Spanish, Portuguese, Italian, and German.
Also read: Facebook Gaming Hops on to Apple’s App Store
Founded in 1994 as an online bookstore, Amazon.com, Inc. (NASDAQ:AMZN) is a diversified technology company that primarily operates as a global e-commerce platform. However, the company is also operating in the cloud computing, and consumer electronics industries. Twitch, a live streaming platform and Whole Foods Market (a chain of supermarkets) are also operating as subsidiaries of Amazon.
On 24 September 2020, Amazon launched new eero 6 Series Mesh Wi-Fi Systems Starting at USD 129. These all-new mesh Wi-Fi systems feature Wi-Fi 6, the most advanced technology providing more powerful performance, quick speeds, and better support for simultaneously connected devices.
Apple Inc. (NASDAQ:AAPL) manufactures and designs computer software and consumer electronics and also provides online services.
On 15 September 2020, Apple Watch SE was launched by Apple along with Apple Watch Series 6. Apple Watch Series 6 has additional health capabilities as compared to the previous Apple Watch models. It has a new feature that determines the oxygen saturation of the customer’s blood for improved understanding of complete fitness and wellness.
Apple Watch SE uses a more power-efficient barometric altimeter, with nearby Wi-Fi networks and GPS. The “always-on altimeter” provide real-time elevation throughout the day.
Netflix (NASDAQ:NFLX) offers subscription-based online streaming of films and TV shows. The company is also producing movies and TV shows. It was founded in 1997 and is the smallest corporate in the FAANG group with respect to its revenues, net income, and market capitalisation.
Google LLC, the most significant subsidiary of Alphabet Inc (NASDAQ: GOOGL, NASDAQ: GOOG), offers online services such as email services, video streaming service and office software.