FAANG Shares (Meta Platforms (NASDAQ:META), formerly Facebook, Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Netflix (NASDAQ:NFLX) and Google’s parent company Alphabet (NASDAQ:GOOGL, GOOD)) significantly lost value in the past year. However, with the exception of Netflix, the remaining four stocks have outperformed the S&P 500 (SPX) year-to-date, with META shares posting the highest gains. We used TipRanks’ stock comparison tool to compare Amazon, Apple, and Netflix to pick FAANG’s favorite stock on Wall Street at current levels.
Amazon (NASDAQ:AMZN)
The impact of macroeconomic pressures on consumer spending and the reopening of physical stores impacted Amazon’s retail business. Additionally, restraint in IT spending amid fears of an impending recession slowed the growth rate of the company’s Amazon Web Services (AWS) cloud computing business.
Amazon is improving its cost structure to navigate a difficult environment. The company recently announced it would cut 9,000 additional jobs after previously laying off 18,000 people. The last round affected AWS, advertising, human resources and Twitch units. Overall, Amazon is taking initiatives to make its structure leaner and more profitable.
Is Amazon a Buy, Hold or Sell?
Responding to Amazon’s cost-cutting measures, William Blair analyst Dylan Carden said, “Assuming The Street comes close to its revenue assumptions, which we believe are relatively conservative, we find that the company’s overall operating results have a combined upside potential of almost 40%. over the next two years as cost items move back towards relatively consistent historical patterns.”
Additionally, Carden is bullish on the company’s Prime offering and AWS business. He believes AMZN stock offers compelling value ahead of a potential AWS “reacceleration” coupled with the retail business’s “ultimate profitability.” The analyst forecasts an acceleration in AWS business later this year, driven by new customer adoption.
Wall Street’s strong buy consensus rating for Amazon is supported by 37 buys and one hold. The average price target of $136.86 suggests an upside potential of around 39%. Shares are up over 17% year-to-date.
Apple (NASDAQ:AAPL)
Often regarded as one of the most innovative companies in the world, Apple has delivered significant returns for shareholders over the past decade. Last month, the company reported a decline in sales in the December quarter, citing production disruptions in China, currency issues and macroeconomic challenges.
Apple expects revenue performance in the March quarter to be similar to the December quarter. While the impact of near-term pressures can’t be ignored, Apple’s strong fundamentals, solid product portfolio, and growing services business continue to make it an attractive stock for multiple analysts.
Is Apple stock a buy?
Earlier this month, Wedbush analyst Daniel Ives raised Apple’s price target to $190 from $180, reaffirming a buy rating after reviews by his firm showed that demand for iPhones in China has increased.
Ives said iPhone supply was stable in January and February, in contrast to the December quarter, which was impacted by supply shortages due to China’s zero-COVID policy. In addition, early signs in March suggest that conditions will continue to improve.
Ives added that Apple is gaining market share in China and demand in the US and Europe is also doing well. He also believes that the new iPhone users that have joined the company’s ecosystem over the past year will lead to a renewed acceleration of Apple’s services business in the coming quarters.
Overall, Apple’s Moderate Buy consensus rating is based on 24 buys, six holds, and one sell. At $170.18, the average AAPL stock price target implies nearly 8% upside potential. Shares are up more than 21% year-to-date.
Netflix (NASDAQ:NFLX)
After losing subscribers in the first two quarters of 2022, streaming giant Netflix bounced back nicely in the second half of 2022. The company reported 7.66 million net paid subscribers for the fourth quarter of 2022, beating Wall Street’s expectation of 4.58 million subscribers.
The company is trying to increase its revenue through various initiatives, including better content, an ad-supported subscription, and a paid sharing program. However, the road ahead is not easy given intense competition not only from other streaming players but also from other entertainment channels like YouTube and short-form entertainment like TikTok.
What is the target price for NFLX stock?
Last week, Oppenheimer analyst Jason Helfstein reiterated a buy rating on Netflix stock with a price target of $415. Helfstein noted that NFLX shares initially rallied following fourth-quarter 2022 results, but then began to fall on concerns that the company’s crackdown on password sharing could lead to higher churn. Shares were also hurt by the company’s slower adoption of the ad-supported tier and macro issues.
“We believe our original thesis hasn’t changed: advertising is increasing the overall addressable market, content competition is waning, and paid account sharing will provide tailwinds over the long term,” Helfstein said.
The Street’s Consensus Moderate Buy rating for Netflix is based on 17 buys, 16 holds, and two sells. The average price target of $356.20 indicates a 21.2% upside potential. Shares are flat year-to-date.
Diploma
Macroeconomic pressures are expected to impact the short-term performance of Amazon, Apple and Netflix. Wall Street is more bullish on Amazon and confident about its long-term potential thanks to its leadership in e-commerce, AWS’ dominant position in cloud computing, and growing advertising business.
According to TipRanks’ Smart Score System, Amazon gets a 9 out of 10, which means the stock has the ability to generate above-average returns over the long term.
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