Facebook, Amazon, Apple, Netflix, Google and Microsoft (“FAANGM”)
Apple, Microsoft and Google: These are the safest companies to hold in this group today because they are not particularly overvalued considering their technology leadership in the most important next generation tech cycles, as shown by our thematic screen on page 8.
Facebook and Amazon: These look a little expensive according to our valuation screen on page 9 and therefore may be more volatile over the coming days if investors get nervous over the tech sector. Yet both are likely to continue benefiting from their exposure to a multitude of next generation tech cycles.
Netflix: This is the most exposed within the group because it is a one-trick pony - it is the market leader in a single theme (internet TV). It is less able to benefit from the next generation of tech cycles (such as voice, internet of things, AI, augmented reality, blockchain, mobile payments, ecommerce, big data, robotics, cybersecurity, cloud, etc.) to which all the other FAANG companies are exposed. It will also see an escalation in competition from Amazon and other tech titans in the coming months, though its first mover advantage remains strong enough for us to believe that it is too early to sell a stake in this company.
Baidu, Alibaba and Tencent (“BAT”)
Baidu: Baidu’s sagging share price reflects a string of setbacks - from malfunctioning advertising algorithms to the loss of its AI head, Andy Ng. However, our research indicates thematic strength ahead.
Alibaba: Thematically, Alibaba is extremely strong. But our avoid rating reflects the investor risks.
Tencent: The strongest tech platform in China, in our view.
In this report we will look at the two groups FAANGAM and BAT.
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- About our Thematic Research Ecosystem
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