Facebook, Amazon and Netflix each hit records last week, but not all of the FAANG trade has been so lucky.
Apple and Google parent Alphabet remain 3% and 8%, respectively, below their own all-time highs.
Todd Gordon, managing director at Ascent Wealth Partners, said all the FAANG stocks remain solid investments, especially praising Facebook’s record-making move.
“The Facebook break is pretty spectacular. It’s been a long consolidation — as you pull up that first weekly chart, it’s just a beautiful trending parallel channel. … This $220 break was very, very impressive,” Gordon told CNBC’s “Trading Nation” on Thursday.
Facebook broke above $220 on Tuesday. It closed Friday at $234.91.
“Facebook’s doing a lot of good things [with advertising and targeted posts] and I love the breakout. It’s sort of reminiscent of the recent Netflix break that we saw but I guess my underlying point is these FAANG stocks are strong once again and they’re continuing to lead the overall market much like they did pre-Covid-19,” said Gordon.
The FAANG stocks have been among the largest contributors to the market’s rebound off March lows. The stocks have a combined market cap of $4.4 trillion and, therefore, have a larger influence on the market cap-weighted S&P 500.
However, Chantico Global CEO Gina Sanchez does see some reason for concern with the group.
“Apple, for example, I think if you are going to buy your next Apple phone, you might put that off. Apple, they’re such high-priced products that they require very strong consumption and what we’re clearly seeing is that this is lasting longer than we’ve expected and the consumption is going to be very weak,” Sanchez said during the same segment.
Apple isn’t the only FAANG stock facing headwinds. Sanchez added that Facebook and Alphabet are competing with major broadcasters for “an ever-shrinking ad spend in this next coming year.”
There is one FAANG stock that Sanchez said is best equipped to weather the coronavirus pandemic.
“Amazon is the big winner in all of this because everyone [putting] off going to the grocery store has ordered directly from Amazon, has ordered anything they need from any store as most retail has been shut down from Amazon. I think Amazon has the longest, broadest story that would come out of this with the trends still intact,” said Sanchez.
Disclosure: Ascent Wealth Partners holds AMZN, NFLX, GOOGL, AAPL and FB.
