Sunday, July 21, 2024

What FAANG Stocks to Watch in 2019?

Although the US equity markets saw a greater amount of volatility in Q4 2018, the first two months of 2019 seem more promising from a performance point of view. Also, FAANG stocks continue to dominate the markets and despite heavy losses, they have managed to recover a significant amount of lost ground.

However, despite being part of the same industry, we can notice a certain divergence in terms of performance, which is why today we will talk about the most important FAANG stocks to watch in 2019 if you are active in live stock trading.

AAPL Stock

After reaching an impressive $1 trillion in market cap, AAPL had been the second biggest disappointment after Facebook, since it lost around 40% in value between October and the beginning of January.

In line with the market performance, the stock price had recovered 28% from the lows and it is now considered to “present opportunity”. That’s how Bank of America labeled the AAPL potential, after upgrading it from neutral to buy.

Despite its lower valuation, several headwinds lie ahead. The smartphone industry seems to have topped, as the latest numbers show a diminishing demand, especially in important markets like China. Second of all, it will be important to watch the earnings report due next month, in order to see whether we are headed towards an earnings recession, as some analysts predict.

FB Stock

The Facebook stock topped since June 2018, after poor earnings guidance drove the price lower, in what will eventually become a -48% drop in value. However, the selling pressure had been gradually evaporating and since December 24th, the stock set up a nice 40% rally, with improved prospects for the months to come, if we judge by the current price action structure.

As with AAPL, earnings will be on the spotlight for Facebook as well. Since the Tax Reform, most of the major US public companies posted strong gains, but as many experts expect, the influence of lower taxes is close to an end.

We could soon enter a period of slower growth and investors might want to adjust their portfolios once again. If earnings will continue to surprise on the upside and if China and US will show that the trade war is close to an end, Facebook could continue to edge higher, thanks to its lower valuation as compared to the other FAANG stocks.

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