What was super-big in 2015, the so-called FANG stocks, took a dive to start this year, and as is inevitable, the perma-bears on Wall Street took to the airwaves and more to say the end was near. Well that didn’t last long, and the group of four large cap tech stocks — Facebook, Amazon, Netflix and Google — have roared back and are doing extremely well.
In a new research report on internet stocks, the analysts at JPMorgan make the case that owning these market leaders still makes sense despite in some cases almost meteoric rises from the lows in early February. They are bullish enough that they raise their price target on each stock in the group, and some are pushed much higher. All of the companies are rated Overweight at J.P. Morgan.
The search giant continues to expand and is even working on a driverless car now. Alphabet Inc. (NASDAQ: GOOGL) provides online advertising services in the United States, the United Kingdom and rest of the world. It offers performance and brand advertising services, and it operates through Google and Other Bets segments. The Google segment includes principal internet products, such as Search, Ads, Commerce, Maps, YouTube, Apps, Cloud, Android, Chrome and Google Play, as well as technical infrastructure and newer efforts, such as virtual reality.
The Google segment also sells hardware products, comprising Chromecast, Chromebooks and Nexus. The Other Bets segment includes businesses such as Access/Google Fiber, Calico, Nest, Verily, GV, Google Capital, X and other initiatives.
Top Wall Street analysts point out the company reported better than expected second-quarter results with the best top-line growth since the third quarter of 2014. Paid clicks came in above Wall Street estimates, growing 29%, while Google websites paid click growth was 37% with YouTube and mobile accounting for much of this strength. EBIT margins also continued to see outstanding growth at 39%, versus less than 38% in the same period last year.
JPMorgan raised its price target to $1,025 from $950, and the consensus target is $940.15. The shares closed Tuesday at $810.73.