Watching The FAANG Stocks

The FAANG stocks are Facebook, Amazon.com, Apple Inc., Netflix and Google parent Alphabet Inc.

The #FAANG stocks have fallen from recent peaks.  However, they could get some relief if they beat, or at least meet, Wall Street estimates.

Certainly, Wall Street is hoping that first-quarter earnings growth and corporate forecasts are strong enough to bring the FAANG group of stocks back into favor.  This would take the spotlight off worries that caused the recent sell-off in the high-flying group.

Shares in the group, which led the S&P 500 to record highs in January, often trade together.  They were pummeled late in the quarter on worries about a data privacy scandal at Facebook (FB) and U.S. President Donald Trump’s public criticism of Amazon.com (AMZN).  In addition, fears of a trade war with China escalated during the quarter.

For the group, analysts expect average first-quarter year-over-year earnings growth of 25.8 percent.  This would be up from 12.4 percent growth in the fourth quarter and a 12.8 percent increase a year ago.

“All we’re getting now is negative news.  However, once we start to see the numbers, you’re going to see a bigger spotlight on the success these companies are having.”  This according to Daniel Morgan, portfolio manager at Synovus Trust in Atlanta.

For example, analysts expect Netflix earnings growth of 59 percent and revenue growth of 39 percent.

Furthermore, there is some technical reason to believe that the FAANG stocks will bounce up from their recent lows.

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