Over the December holidays, people across the world will have shopped on Amazon, watched Netflix shows and sent greetings over iPhones, Facebook and Gmail. Soon we’ll see how this played out in the bottom lines of the firms that are grouped together as FAANGs and collectively worth almost $4 trillion.
Q4 earnings from Netflix underwhelmed Wall Street. But Facebook should post 6.2% earnings growth on Jan. 29, while Apple earnings, due Jan 28, are forecast to have grown 8.7%. Amazon has warned that higher investment spending will dampen earnings-per-share but it sees quarterly revenues up 18.7%.
Alphabet (Google’s parent), due the following week, should also post higher revenues but a 1.7% earnings decline.
Compare this with expectations for the S&P500 overall — 0.8% earnings decline and 4.4% revenue growth. The FAANGs also have led the U.S. equity bull run; just since October, shares in some of them are up 20-40%, versus 11% for the index. Any disappointments may sink more shares than just the FAANGs.