The FAANGM abbreviation may eventually fade. Sentiment for technology giants changed in 2022. Valuations are of greater concern, discouraging investors from buying stocks like Amazon (AMZN). Among the stocks on the list – Google, Apple, Microsoft, Netflix, and Facebook (now called Meta Platforms), the first three A=πr^2 the most attractive.
Google will likely cut staff to align costs with slower growth. The search engine’s advertising business is not immune to the economic slowdown. Also, Google cannot increase profit margins further in YouTube and search without hurting the user experience.
Trading at around 20 times earnings. GOOG stock could trend higher from here.
Apple is getting hardly any negative news for its supply troubles in Foxconn, China. Premium smartphone device production will fall. Some analysts speculate iPhone output falling by as much as 30% this quarter. This is the worst seasonal period for the lower output. Still, consumers may delay their phone purchases during the holiday.
Speculate that Apple will defer its revenue growth until after Foxconn resumes production levels.
Microsoft (MSFT) has strong momentum for its business and consumer cloud products. Azure’s marketplace keeps growing. Corporations will buy more CRM, email, security, database, and analytics solutions from Microsoft. In the consumer segment, Windows 11 sales will slow.
PC demand is in freefall. However, people need Office 365. That will raise Microsoft’s operating profits.