MENU

The FAANG stocks have been crunched into a bear market

The FAANG shares have been bitten hard and are now in a bear market.

At the end of official close in the US market earlier today:

The Apple share price was down 4.8%

The Amazon share price fell 1.1%

The Microsoft share price dropped 2.8%

The Netflix share price was in the red by 1.3%

However, it looks much worse since their all-time highs earlier in the year. The Facebook share price is down 39%, Amazon is down 27% and Apple is down 24%. It’s a similar story for the other tech shares.

Collectively, we have seen a NASDAQ exchange-traded fund (ETF) on the ASX, being the BetaShares NASDAQ 100 ETF (ASX: NDQ), fall by 15% since its high in October last month.

Rising interest rates have damaged the valuations of the tech shares significantly. Trade wars, worries about political intervention and slowing growth are also factors for some of the NASDAQ heavyweights.

Some bearish analysts point to a stagnant user base for Facebook. Apple’s smartphone sales surely can’t keep rising, right? Amazon is trading at a silly valuation. And so on.

However, this does not strike me like the 1999 dot com bust. All of the FAANG shares are generating huge revenues and most of them are reporting big profits. Compared to our ASX tech darlings like WiseTech Global Ltd (ASX: WTC) and Afterpay Touch Group Ltd (ASX: APT), shares like Facebook and Alphabet (Google) seem positively cheap for their growth rates.

Foolish takeaway

Whilst it is true to say that rising interest rates should be a dampener on valuations, the sell-off seems overdone considering the huge balance sheets and continued good growth prospects of online advertising, cloud computing and so on.

After the latest falls they look even better value. But, that doesn’t mean they won’t fall further from here over the next few months.

I’m happy to stick to buy quality ASX shares like these top growth stocks for my portfolio throughout this market volatility.

Top 3 ASX Blue Chips To Buy For 2019

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2019."

Each one pays a fully franked dividend. The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia owns shares of AFTERPAY T FPO and WiseTech Global. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

5 ASX Stocks for Building Wealth After 50

I just read that Warren Buffett, the world’s best investor, made over 99% of his massive fortune after his 50th birthday.

It just goes to show you… it’s never too late to start securing your financial future.

And Motley Fool Chief Investment Advisor Scott Phillips just released a brand-new report that reveals five of our favourite ASX stocks for building wealth after 50.

– Each company boasts strong growth prospects over the next 3 to 5 years…

– Most importantly each pays a generous dividend, fully franked.

Simply click here to find out how you can claim your FREE copy of “5 ASX Stocks for Building Wealth After 50.”

See the stocks now