Apple Breaks Out of the 'FAANG' Stock Slump
October 11 2019 - 2:39PM
Dow Jones News
By Paul Vigna
The past year has been a mixed bag for the popular "FAANG"
stocks, but one of the "A's" is back on track.
Shares of Apple Inc. rose 2.1% to $233.15 Friday, poised to pass
their closing high of $232.07, set in October 2018. After a brutal
selloff last fall, the stock has surged about 64% from its 2019 low
of $142 set on Jan. 3.
For most of last year, all the FAANGs were rising. Facebook
Inc., Amazon.com Inc., Netflix Inc. and Alphabet Inc. all set
records in the second half of 2018. Most have fallen since then,
though.
Facebook is down about 14% since hitting a high of $217 in July.
Amazon is down about 15% from its September 2018 high of $2,039.
Netflix is down 32% since hitting a record $419 in July 2018.
Alphabet hit a record high in July 2018, slid into 2019, set
another new high in April -- and is down 6% since then.
These highly profitable, high-profile names have propelled most
of the market's gains in recent years, spurring CNBC's Jim Cramer
to coin the "FANG" moniker in 2013. More and more, they have been
treated as parts of a whole, and that trading pattern has grown as
some exchange-traded funds focused on tech stocks have become FANG
proxies.
Apple was unofficially "added" to the FANG group in 2017,
resulting in the ungangly new nickname FAANG. But it's different
from the others not just because of its late addition.
The first four companies are mainly software companies. Apple
has software, too, but is really more of a hardware company. What
makes that hardware even more valuable is if Apple can put
compelling software on it, and that's where Apple may take a big
bite out of some of its FAANG siblings.
Apple TV is set to launch in a few weeks, putting the company
into direct competition with Netflix and Amazon, as well as
companies like Walt Disney Co. and CBS Corp. With about 900 million
iPhones out there, Wedbush Securities analyst Daniel Ives figures
Apple could probably get about 100 million consumers using its
streaming service over the next three to four years.
That would add about $15 a share to Apple's bottom line and,
along with demand for new iPhones, make the stock itself more
valuable. Mr. Ives raised his target price to $265 from $245.
Write to Paul Vigna at paul.vigna@wsj.com
(END) Dow Jones Newswires
October 11, 2019 14:24 ET (18:24 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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