5 Tech Stocks That More Than Doubled FAANG In 2018

On Dec 4, the FAANG group of stocks lost $140 billion in a searing market slide. The trading session was symptomatic of a year which has been a tough one for the group. FAANG stocks may have led gains during the longest Bull Run in the U.S. stock-market history, but in 2018 they were weighed down by individual weaknesses and broader market concerns.

Analysts now believe that the group’s troubles are far from over. With macroeconomic risks on the rise and a tougher rate environment around the corner, FAANG’s problems may just be getting started.

However, analysts believe that though the broader tech sector had a difficult 2018, it remains a good investment option. Small companies focusing on innovation may be better bets heading into next year. This is why it makes for a smart to invest in select tech stocks that returned double the FAANG group’s gains in 2018. 

Macroeconomic Concerns Weigh on FAANG

In 2017, high-growth tech stocks were all the rage. The FAANG group had powered the post-recession rally to a significant extent and by the middle of last year, they looked all but invincible. However, by the third quarter of 2018, things began to unravel for the group until they suffered severe declines.

By late November, all the FAANG names had lost more than 20% from their most recent peak, pushing them into a bear market. With the U.S.-China trade war intensifying, macroeconomic concerns heightened, pushing investors toward defensive sectors. Additionally, the Fed seemed unwilling to shed its newfound hawkishness.

Individual Weakness Contribute to Slide

Stock-specific weaknesses also contributed to the group’s decline. At this point, Facebook (FB  - Free Report) is the worst performer of the group, down 17.8% year to date and more than a third lower than its recent July peak.

Data privacy concerns sparked off primarily by the Cambridge Analytica incident has been the primary cause for this downturn. On Mar 19, the social media giant’s shares tanked 6.8%, recording its worst decline in four years, after it was accused of a data misuse scandal that affected the personal information of more than 80 million users.

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