2020 was a great year for FAANG’s actions. While returning from Alphabet GOOGL has been disappointing, Apple AAPL, Amazon AMZN, Netflix NFLX and Facebook FB had an impressive run on the stock exchanges.
The group benefited from strong demand for e-commerce services and increased media consumption, as people were confined to their homes due to blockades, on-site shelter guidelines and measures of social distance. In addition, the wave of work at home and online learning has driven demand for cloud computing services.
In addition, the infusion of AI and ML technologies in almost all solutions has boosted the performance of FAANG stocks. In addition, the solid adoption of smart wearables and connectivity solutions – including smart speakers – has been a major driver of growth.
In addition, the FAANG group has been instrumental in the fight against the spread of the coronavirus. Contract tracking tools developed by Apple and Google helped to flatten the curve a bit. Facebook helped people stay in touch in the midst of the pandemic. Voice and video calls more than doubled on Messenger and WhatsApp.
Notably, FAANG’s general shares returned 61.5% year-to-date, exceeding the S&P 500 high of 16.9%.
Apple has the best performance, the worst alphabet
Apple is currently the best performing stock among the FAANGs, thanks to the Services business momentum. The solid adoption of the Apple Watch Series 5 helped the iPhone maker strengthen its presence in the personal health monitor market. In addition, the company is benefiting from the solid demand for iPhone 12 compatible with 5G. It reportedly asked suppliers to increase production for the first half of 2021. The company’s expanded portfolio that includes the streaming service Apple TV + is also a key catalyst.
Amazon performed well in 2020, thanks to solid e-commerce demand, retail efforts and strong Prime momentum. The company has benefited from a strong distribution network and fast delivery services enabled by Prime. In addition to food retailing, its increasing focus on the fashion business has also helped growth. In addition, the Amazon Web Services portfolio and services are a key catalyst.
Netflix’s solid content portfolio helped it successfully navigate the stock market affected by the coronavirus in 2020, courtesy of heavy investments in the production and distribution of localized content in a foreign language and an expanding international presence. However, the intensification of competition in the streaming market should hurt the prospects of the streaming giant.
Year-to-date performance
Meanwhile, despite persistent problems related to user data and privacy, coupled with the proliferation of fake news, terrorism-related content and political propaganda, Facebook’s user base has expanded steadily over the year. However, its ad sales were also hampered by weakness in the automotive and travel industries in 2020. This is expected to hamper revenue growth, at least in the short term.
Alphabet is currently the worst performing stock among the FAANGs. The company’s advertising growth slowed in 2020 due to the pandemic. In addition, the growing litigation problems and intensified competition from Facebook in the U.S. digital advertising market have hampered the movement of stock prices. However, Google’s robust mobile search and Alphabet’s focus on AI, cloud and home automation space have been the main growth drivers.
SaaS shares outperform FAANG
Although the performance of FAANG’s shares was impressive, there are some Software as a Service (SaaS) shares that outperformed the group’s performance in the year. Here, we discuss five of these actions.
SaaS inventory versus FAANG (year-to-date returns)
Zscaler ZS shares have risen 328.6% in the year to date. It is one of the world’s leading providers of cloud-based security solutions. The company is increasing the demand for cybersecurity solutions due to a series of data breaches. The increased demand for privileged access security in digital transformation and cloud migration strategies is a key growth factor.
In addition, the company’s Edge cloud for policy enforcement, multi-tenancy, proxy for SSL or TLS inspection and access to the zero trust network are robustly positioned for adoption amid a thriving remote work culture.
In addition, the strong presence in vertical sectors, such as banks, insurance, health, public sector, pharmaceuticals, telecommunications services and education is another important catalyst.
The strength of this company’s Zacks Rank # 2 (Buy) portfolio increases its competitive advantage and helps to add users. Zacks’ consensus estimate for 2021 tax profits was revised upwards by 27.6% in the last 60 days to 37 cents per share.
The Trade Desk TTD shares have soared 221.2% in the year to date. It is a technology platform provider for advertising. Through their cloud-based self-service platform, ad buyers create, manage and optimize data-based digital advertising campaigns.
He’s benefiting from the push to buy programmatic ads. In addition, the emergence of digital content has boosted the use of the company’s stock in all forms of ConnectedTV. In addition, the recovery in ad demand and the spending scenario is expected to boost profits.
Notably, spending on digital advertising surpassed the purchase of traditional media last year. In addition, citing reports from eMarketer, WNIP revealed that the digital ad market is estimated at $ 225 billion by 2024 in the United States alone. This reflects an increase from the estimated market value of almost $ 150 billion this year. This gives The Trade Desk a lot of room to expand, and marketers need to reach consumers beyond Google and Facebook.
The digital advertising company currently boasts a Zacks Rank # 1 (strong buy). You can see the complete list of today’s Zacks # 1 Rank stocks here.
Zacks’ consensus estimate for its 2020 earnings has been revised to 58.4% upwards in the last 60 days to $ 4.99 per share.
DocuSign DOCU has increased 209.3% in the year to date. It is a popular name for authenticating documents on the Internet using an electronic signature.
As companies of all sizes have moved their office staff to work from home for security reasons, workplaces have adopted digital productivity tools to do things virtually. One product that has become a key part of the remote work toolbox for many companies is DocuSign’s time-saving electronic signature application. A comprehensive set of cloud-based software tools can double your addressable market beyond the electronic signature business.
The stock, with a Zacks Rank 3 (Hold) at the moment, leverages blockchain technology to allow customers to adapt to smart technology and make paper contracts digital. Zacks’ consensus estimate for its earnings in 2021 has been revised upwards by 34.5% over the past 60 days to 74 cents per share.
Veeva Systems Inc. VEEV has increased 98.4% in the year so far. It provides cloud-based software to the life sciences industry in North America, Europe, Asia-Pacific, the Middle East, Africa and Latin America.
Its exclusive solutions include Veeva Vault, Veeva CRM, Veeva Network and Veeva OpenData. The cost-effectiveness of cloud-based applications over in-house applications is attracting life science companies and is an important catalyst. The company continues to expand its market share and has several international CRM expansions with existing customers.
The knowledge of this Zacks Rank # 3 company about the different components of the life sciences industry is helping to build targeted products. Zacks’ consensus estimate for its earnings in 2021 has been revised upwards to 5.6% in the past 60 days, to $ 2.83 per share.
Zendesk, Inc. ZEN has risen 82% in the year so far. It is a cloud-focused company with a software portfolio focused on sales, support and customer engagement. The company started out as a customer support cloud and now, with Zendesk Sunshine, has become a complete customer relationship management platform.
The platform is open and cloud-based and can be easily integrated with other corporate software. It provides companies with omnichannel solutions so that they can meet customer needs in the most convenient way. Zendesk helped connect nearly 900 million customer inquiries to a solution last year.
The strength of this company’s Zacks Rank # 2 portfolio increases competitive advantage and helps add users. Zacks’ consensus estimate for its 2021 tax profits has been revised up 21.7% in the last 60 days to 56 cents per share.
Zacks Top 10 Stocks for 2021
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Amazon.com, Inc. (AMZN): Free inventory analysis report
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