It seems like institutional investors are split one way or the other on the high-cap tech stocks: Facebook, Amazon, Netflix, and Google (Alphabet)
Warren Buffet is notorious for shying way from tech stocks. As of March 31, 2018, Berkshire Hathaway had a 4.9% stake in Apple, but other than that, an absence of new-age tech companies. Buffet is known for his classic value investing style, and he believes the FANG group don't fall in line with that.
If there's lots of technology, we won't understand it
After a rough start to the week on July 30th, investors are beginning to question the strategy of crowding into a few growth stocks. Both Facebook and Netflix missed earnings targets by a long shot, with Facebook recording the largest single day loss in US stock market history.
"Of the five FAANG stocks that have reported, two have flopped along with a few other high growth/high momentum names and this group is coming under pressure," Jefferies Equity Strategist Steven DeSanctis said in a note to clients Monday. "We think this presents us with the catalyst to shift toward value and valuations mattering."
"We viewed Friday's moves as a sign of market exhaustion and think shift toward value could be more sustainable," Michael Wilson, equity strategist at Morgan Stanley, said in a note to clients Monday. "With Amazon's strong quarter out of the way and a very strong 2Q GDP number, investors were finally faced with the question of 'what do I look forward to now?'"
On the other hand, Goldman Sachs' took the opposite view
Facebook's disappointing results shouldn't scare investors out of the entire sector
I am not a fan of investing in the new-age tech companies. I believe they're overhyped, and reliant on their stories and eccentric brand identities to attract investors. Companies that make a lot of money very quickly, tend to lose a lot of money very quickly, I prefer to stick to sectors that are more tried and trusted (read: old-fashioned).
That's just one guy's opinion though, what do you guys think, party over for the FAANGs?
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