Wall Street has been souring since October on one of the year’s most popular trades, sparking a selloff that has erased roughly $575 billion in market value from Facebook Inc. (FB), Amazon.com Inc. (AMZN), Apple Inc. (AAPL), Netflix Inc. (NFLX), and Google parent Alphabet Inc. (GOOGL). The quintet—commonly known as the FAANG stocks—has suffered steep losses as investors rethink their lofty valuations and projected growth in the months ahead. But their combined market cap still totals nearly $3 trillion, giving them considerable heft in the S&P 500 index (.SPX).
- Facebook is the worst-performing stock of the FAANG group, shedding 21% so far this year, amid questions over its handling of user data. Losses have been mounting since July, when the social-networking firm warned about slowing growth, putting Facebook on pace for its worst year since going public in 2012.
- Amazon.com posted its second straight quarter of record profitability last month, but slowing revenue growth spooked investors, sending shares down 20% in October alone.
- The selloff robbed Apple of its $1 trillion market cap, leaving it dangerously close to entering bear-market territory, marked by a fall of at least 20% from a recent high. The iPhone maker's losses have accelerated since the beginning of the month, when Apple offered investors a tepid revenue forecast for the current quarter.
S&P 500 companies whose combined market value would equal the valuation losses FAANG stocks incurred since the end of September:
- Netflix had been one of the best-performing stocks in the S&P 500 throughout the first half of the year, avoiding some of the volatility that rattled other tech giants in the early spring. But the video-streaming company reported weaker-than-expected subscriber growth in July, kicking off a decline that accelerated in October.
- Alphabet also has shown signs of slowing growth, stirring further angst among investors over tech’s durability during an economic slowdown. The search-engine giant has suffered a bruising period after reporting a surging profit on slowing growth in sales, setting up shares of Alphabet for their weakest year since 2014.