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3 FAANG Stocks Worth Your Attention In May 2020

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Are You Sharpening Your FAANG Positions Right Now?

If you are somewhat skeptical about the title of this article, you are forgiven. The “FAANG stocks” have had meteoric gains over the past decade. Some may wonder whether this is a bubble, just like the dot-com bubble. Rest assured, the FAANG stocks are not experiencing such a bubble. Nope, I didn’t say that myself. It is none other than Warren Buffett, the CEO of Berkshire Hathaway (BRK.A Stock Report) (BRK.B) who said so. Now that you are feeling better, read on. 

For investors who’ve never heard of the FAANG stocks, I’m referring to:

FAANG Stocks Proved They Are Immune To The Coronavirus

Many sectors continue to be devastated by the current pandemic. One bright spot is the tech sector, which has shown remarkable resilience during this time. In the past few weeks, the biggest tech companies reported their quarterly earnings. We know Amazon posted lower profits than anticipated.

Jeff Bezos also said the next quarter may not be profitable due to expenses associated with Covid-19. Nevertheless, the other tech giants posted strong results and had a great rally for the past few weeks. That said, if you watch closely, some of the tech stocks still have great upside potentials.

FAANG Stocks To Watch#1 Facebook

Sure enough, Facebook’s ad revenue is likely to take a hit as retailers are experiencing store closures and consumers are sheltering at home. Many investors may be taken aback by that. But it is good to know that there are catalysts they are missing out. The “Stories” format across all of its apps (Instagram, WhatsApp, Messenger and Facebook) has huge potential for improved monetization in international markets.

Stories & International Markets Are The Catalysts 

Maybe you are not familiar with how “Stories” works. You will be glad to know it is a particularly promising ad format. Advertisers love it, probably because the format is typically full screen. That means it is viewed by highly engaged users. The growth of Stories advertising was 100% in Q4 of 2019 compared to the same period a year ago.

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One thing to note is that the ad revenue per user is still much lower in international markets compared to the US and Canada. We believe that these international markets will catch up over time. This will likely drive significant growth for Facebook and strengthen its position as one of the best tech stocks to buy now.

FAANG Stocks To Watch #2 Amazon

Amazon owes its success to its retail ecosystem. The company controls about 38% of all U.S. e-commerce. The company has been quite successful in keeping a good profit margin. At the same time, it has managed to retain loyal customers on its Prime membership.

But what attracted me towards Amazon is the company’s cloud-services segment, Amazon Web Services (AWS). AWS is growing at twice the pace of the e-commerce segment. Since 2018, AWS went from contributing 11% of total sales in 2018 to 12.5% of yearly revenue in 2019. AWS is poised for more growth.

It expects to defend its leadership in cloud computing, despite competition from other major tech companies. The global cloud computing market is witnessing double digit growth, thanks to the fact that more and more of our lives are moving online. We believe the upside potential we are seeing here could be unparalleled.

FAANG Stocks To Watch #3 Apple

The first iPhone was introduced by the late Steve Jobs back in 2007. It almost feels like a lifetime ago. Since then, the iPhone has been the primary factor driving AAPL stock prices. We are now on the verge of big changes in the future of Apple (AAPL). The earnings report this quarter could be signaling where the focus should be for the coming decade.

iPhone Down! Mac Down! iPad Down! Wearable & Services Up!

Tim Cook has conveyed his intent to move Apple away from being a products company to a wearable and services provider. The high operating margins in the wearable and services segment have grown at a double-digit rate. And that could be massive if Apple increases the scale of this segment. That said, without Apple’s aggressive push into services and wearables, the company would have been in a much weaker position.

Questions remain to be answered though. You may wonder whether Apple will continue to attract its existing customers to the iPhone. It is thus a smart move for Apple to introduce the budget-friendly iPhone SE 2020 recently when the economy is weak.

The thing is, iPhones still contribute to the bulk of Apple’s revenue. When Apple finally delivers its first 5G iPhone, might that just bring a further boost to the AAPL stock? Tell us what you think, leave a comment below.

By Amos C

Amos is the global markets correspondent for StockMarket.com. His boots on the ground insight into emerging markets has given him the unique ability to stay ahead of new market trends and deliver timely data when it matters most. Based in Asia, Amos has made a point to monitor the foreign markets closely, dissect stock market trends and then apply them to the North American markets; in addition to global markets.

Amos has a deep-rooted background in foreign exchange and commodities. His previous experience working within the cryptocurrency arena has given him the advantage to identify the fast-moving stock market and financial trends. Amos calls Hong Kong home and has been a financial content writer for the last 3 years.

He has managed teams of international media strategists and financial writers to cover all top stories in the stock market each day. His skills include his tireless drive to find the most valid information and actionable details that investors can use to formulate valid decisions on stocks to buy or stocks to avoid. Furthermore, Amos’ ability to cover trending stories across the globe brings StockMarket.com a fresh perspective on key data and how it not only affects the North American markets but also how it could translate to the world markets alike.

Most of the time you can find him diving into corporate filings, focusing on fundamentals that could influence major market moves. One of his passions is researching technology and biotechnology stocks. Some of the most cutting-edge innovations have stemmed from these industries. While many don’t become industry blockbusters, the processes and applications of these innovations has led to some of the biggest developments known to man in the modern age. As a global correspondent, Amos has been able to see both sides of the story as it relates to world news and offers a true, personal approach, cutting through the noise of the mass media. He was integral in reporting on the Hong Kong uprising and doing first-hand research on international sentiment from the novel coronavirus.

In his free time, Amos is an avid fan of music and art and enjoys attending concerts.

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