FAANG Stocks Drop $100 Billion as Alphabet Loss Bites Hard

(Bloomberg) -- One of the year’s hottest trades in stocks just suffered a huge market-value loss, due to angst around earnings.

Led by an earnings-driven sell-off at Alphabet Inc., the so-called FAANG group of major technology and internet stocks lost more than $100 billion in combined capitalization. The five stocks -- Facebook Inc., Amazon.com Inc., Apple Inc., Netflix Inc. and Google’s parent company -- posted their second-biggest drop of the year by this measure, according to Bloomberg data.

The lion’s share came from Alphabet, which dropped 7.5 percent after its revenue missed analyst forecasts. That decline represents $69 billion erased from its market cap.

Much of the rest came from Apple, where a 1.9 percent drop resulted in $19 billion wiped out. The decline came ahead of Apple’s own results, due after the market close. When the FAANGs last saw $100 billion erased from their valuations, it was after Apple cut its outlook in January, which wiped almost $70 billion from the iPhone maker’s valuation.

Among the other names, Amazon fell 0.6 percent, which cut about $6 billion from its market cap, while Facebook’s 0.7 percent decline resulted in $4 billion in lost value. Netflix also ended the day lower, with almost $600 million erased.

While the combined loss is dramatic, it is mostly a reflection of how big these names have become. The group never lost a combined $100 billion in valuation before 2018. Even after the decline, Alphabet’s current valuation is about $828 billion. Both Apple and Amazon have traded with valuations over $1 trillion in the past year.

Investors have flocked to the group in recent years, betting their industry dominance will translate to some of the fastest rates of growth in the market. Apple shares have rallied 28 percent this year while an index tracking the other four is up 32 percent, both beating the the S&P 500.

--With assistance from Lu Wang.

To contact the reporter on this story: Ryan Vlastelica in New York at rvlastelica1@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Lu Wang, Chris Nagi

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