ETFs, Technology

FAANG stock strength more than short term

FAANG stocks

The recent strong performance of the FAANG stocks is more than just a short-term phenomenon triggered by COVID-19.

The FAANG stocks – Facebook, Amazon, Apple, Netflix and Google – have performed well in the most recent financial quarter and a fund manager has assured investors the results are not just a COVID-19-driven spike and these companies still have relevant growth stories, making them solid picks for the future.

ETF Securities analysis of these organisations has shown they are using their earnings power to transform their businesses for the future.

“None of them are standing still,” ETF Securities head of distribution Kanish Chugh said.

To this end, the manager noted Facebook is working on a new project, ‘metaverse’, that will allow users to inhabit virtual worlds together. Company founder Mark Zuckerberg is expecting the initiative to result in the internet playing an even bigger role in people’s lives.

Further, ETF Securities noted Amazon Web Services and Amazon Business, two of the company’s emerging businesses, recently produced better-than-forecast earnings.

In addition, the manager shared the fact Apple has confirmed it has US$80 billion on its balance sheet that can be used to fund its next transformational move.

During the June quarter reporting period, FAANG stocks performed exceptionally, with Facebook reporting revenue of US$29 billion and earnings of US$10.4 billion, double that of its earnings for the same quarter in 2020.

Google’s parent company, Alphabet, had a similar experience, with its June quarter earnings reported as US$18.5 billion, representing more than double its profit for the same period last year.

The quarterly earnings of Netflix were also almost double that of last year, landing at US$1.3 billion.

However, Apple enjoyed the best result of this cohort of companies, reporting June quarter earnings of US$21.7 billion, marking its best June quarter earnings in its 45-year history.

ETF Securities provides access to these FAANG stocks through its ETFS FANG + Exchange Traded Fund.


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