As big tech shares have become somewhat of a safe haven for investor in times of high uncertainty, we take a closer look at their YTD performance to examine what drove their prices during the year.
Facebook, Amazon, Apple, Netflix, and Google. Also known as FAANG, have become this year’s star performers as interest in their products and services has risen as most people were made to stay at home and put their usual activities on hold.
YTD Performance of FAANG Shares
Facebook, Amazon, Apple, Netflix, and Google. Also known as FAANG, have become this year’s star performers as interest in their products and services has risen as most people were made to stay at home and put their usual activities on hold.
And since these companies represent four of the top five largest companies in terms of market capitalization (exclude Netflix), their movement weighs heavily on the movement of the major index as well. The other company in the top five is Microsoft, however they will not be included in our overview today.
Among the observed shares, the top performers is Amazon whose share price is up 74.7% YTD. Following closely in second place is Apple whose share rose 73.7% since the beginning of the year. The rising interest in apple might not coma as such a surprise since the company recently announced plans to manufacture up to 96m iPhones in the first half of 2021, a nearly 30% YoY increase. Clearly the demand for their products is growing. In third places comes Netflix which has become one of the stars among the stay at home stocks as they are referred to with the share price rising 61.3% since the beginning of 2020. Finally, Facebook and Google posted similar results with share of these companies rising 34.1% and 30.8%, respectively, since the beginning of the year.
However, certain dangers have started looming above the perceived safe haven. Two days ago, the European Commission proposed two bills—one focused on illegal content, the other on anticompetitive behaviour—that would empower regulators in some cases to levy fines of up 10% of annual world-wide revenue or break up big tech companies to stop certain competition abuses. To read more about this click here. Yet, despite the regulatory changes, share prices of big tech remained resilient to the potential new expenses.
