2 FAANG Stocks Staging A Comeback

The fabled group of five large-cap tech businesses, so-called FAANG — Facebook (currently Meta Platforms), Amazon, Apple, Netflix, and Google (currently Alphabet) — dominated the stock market through late 2021.

However, a challenging macroeconomic environment in 2022, characterized by stubborn inflation and removal of Covid restrictions, saw big tech struggling to meet and exceed the high expectations of growth in subscribers/users and advertisement revenues set at the height of the pandemic.

The slump in the performance of these tech businesses was soon reflected in the price action of their stocks. Their dismal year can be summarized by the below snapshot at the end of October 2022.

Big Tech

Source: Forbes

However, the drawdown brought the valuations of these compounders to a more comfortable buying point while they did the needful to recapture lost demand and improve the efficiency of their businesses.

In your opinion, which of the below factors is driving the recent string of layoffs in the technology sector the most?

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One Stock to Get Excited About Again

After two quarters of subscriber declines and slowing growth, streaming major Netflix, Inc. (NFLX) bounced back in some fashion as it added more subscribers than analysts estimated in the third quarter. NFLX reported a net gain of 2.41 million subscribers, which was considerably higher than the average 1.1 million additions expected by analysts.

Amid rising competition from other streaming platforms, NFLX reported a subscribers decline of roughly 200,000 in the first quarter and 970,000 in the second quarter, leading its shares to nosedive.

The higher-than-expected subscriber addition in the third quarter surprised the market. NFLX shares jumped after the company’s results were announced on October 18, 2022.

NFLX Chart

Source: MarketClub

NFLX has had a torrid time this year, with its stock declining 55.3% in price year-to-date to close the last trading session at $269.06. However, its shares have gained 12.6% over the past month.

The company comfortably beat Wall Street revenue and earnings estimates in the last reported quarter. Its revenue and EPS beat the estimates by 1.1% and 43.1%, respectively.

After a poor first half where The Walt Disney Company (DIS) overtook NFLX as the market leader, the company took up massive changes, such as introducing ad-supported streaming and cracking down on shared accounts. The company is also considering a cloud-gaming service.

In its letter to its shareholders, the company said that it expects 4.5 million new subscribers in the fourth quarter and expects its revenue to grow to $7.78 billion. Its subscriber guidance is higher than analysts’ estimates of 4 million. Continue reading "One Stock to Get Excited About Again"