Apple Tops FAANG Returns in October

Apple led performance returns of the FAANG stocks in October with a monthly gain of 11.07%.

While the FAANGs have recently come under increased scrutiny from Federal and state governments, they still reported strong returns in October with gains outperforming for the year. Year to date through October 31, the Nasdaq has a return of 24%, with Apple and Facebook both nearly doubling the broad tech market index’s return.

With the third quarter earnings season coming to a close, all five of the FAANGs have reported their quarterly results, showing several disparities and a variety of new insights.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Apple” data-reactid=”34″>Apple

Apple led the October performance among the group and is also leading year to date with a return of 59%. The company reported its fourth quarter and full fiscal year results in October. Fourth quarter revenue came in at $64 billion, increasing 1.8% year over year. Fourth quarter EPS was $3.03, increasing 4% year over year. Revenue was $260.2 billion, decreasing by 2%. Net income for the year was $55.3 billion, a 7% decrease.

Sales of wearables were a key contributor for the year, rising 41% while iPhone sales fell 14%.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Netflix” data-reactid=”44″>Netflix

For the third quarter, Netflix reported the largest comparable quarter EPS growth with a 65% increase. Revenue was also up substantially, with an increase of 31%.

In October, Netflix reported a stock return of 7.39%. Its return for the year is at 7.38%. While reporting a strong third quarter, the company is facing challenges from competitors in the streaming market as product pricing is fierce. In October, ATT announced a new HBO Max offering at $14.99 per month, increasing the options for consumers.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Alphabet” data-reactid=”47″>Alphabet

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Alphabet and Facebook are the two FAANGs currently under the most scrutiny by regulators in new anti-trust investigations. Regardless, Alphabet is closely matching the broad tech index with a year to date return of approximately 21%. In October alone, Alphabet gained 3.1%.” data-reactid=”48″>Alphabet and Facebook are the two FAANGs currently under the most scrutiny by regulators in new anti-trust investigations. Regardless, Alphabet is closely matching the broad tech index with a year to date return of approximately 21%. In October alone, Alphabet gained 3.1%.

In the third quarter, Alphabet beat revenue estimates by $330 million with an increase of 20% to $40.5 billion. EPS of $10.12 missed estimates by $2.34 and fell 23% from the comparable quarter.

Google announced its acquisition of Fitbit in October. The acquisition has generally been received favorably. The new addition of Fitbit will make Google a competitor with Apple in the area of wearables, where Apple showed strong growth in its recent fiscal year report.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Facebook” data-reactid=”51″>Facebook

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Facebook is significantly outperforming the Nasdaq with a year to date return of 46%. In October, Facebook reported a return of 7.6%.” data-reactid=”52″>Facebook is significantly outperforming the Nasdaq with a year to date return of 46%. In October, Facebook reported a return of 7.6%.

Facebook showed strong results across both revenue and income despite challenges and scrutiny. The company is still undergoing questioning over its new Libra cryptocurrency announcement, which has raised concerns from regulators worldwide. Meanwhile, it also continues to face investigations by U.S. Federal regulators over data and multiple anti-trust issues.

For the third quarter, the company reported revenue of $17.65 billion, beating estimates by $300 million and increasing 28.6% year over year. Earnings per share for the third quarter were $2.12, beating estimates by 24 cents and increasing 20% from the comparable quarter. In the third quarter, mobile advertising was a key driver of the success, accounting for 94% of total revenue. The company’s family of products in Facebook, Instagram, WhatsApp and Messenger also continue to grow users at a steady pace.

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