The FAANGs Are Expected to Rule 2021 Markets

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The FAANGs: Facebook (NASDAQ: FB), Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), Netflix (NASDAQ: NFLX) and Google (NASDAQ: GOOGL) are expected to have strong showings into 2021. In a story on Marketwatch, several analysts predicted that the federal stimulus, calming interest rate fears and good business fundamentals will lead to strong performance for these companies as well as for Microsoft (NASDAQ: MSFT).

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Although the analysts interviewed recommended purchasing these stocks, anyone holding a US index fund probably has heavy exposure to them already. The FAANGs plus Microsoft make up about 20% of the value of the S&P 500 index. Their large sizes and strong businesses make them among the most widely names by institutional investors, so people investing in other US stock funds probably own them that way.

Despite the strong outlook, these companies will face some headwinds in the coming year. Amazon is dealing with a unionization effort in Alabama that may expand to other warehouse locations. Facebook and Google are dealing with antitrust investigations, and President Biden has added some technology critics to his administration. 

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And, when pandemic restrictions ease, will people really want to watch Netflix and Amazon Prime while doomscrolling Facebook and Google News?

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Part of the bullish case for these stocks is that they have been weak in recent weeks over interest rate concerns. That offsets much of the concern about how they will fare in a post-pandemic world.

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About the Author

Ann Logue is a writer specializing in business and finance. Her most recent book is The Complete Idiot’s Guide: Options Trading (Alpha 2016). She lives in Chicago.

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