The year 2020 was great for FAANG shares. While returning from Alphabet GOOGL was disappointing, appeal AAPL, Amazon AMZN, Netflix NFLX en Facebook FB had an impressive run on the wallets.
The group has benefited from strong demand for e-commerce services and increased media use, as people are mostly confined to homes due to lockouts, shelter guidelines and social distance measures. In addition, the work of home and online learning has driven the demand for cloud computing services.
In addition, the addition of AI and ML technologies in almost every solution has driven the performance of FAANG shares. In addition, the portable use of portable solutions and smart connectivity solutions – including smart speakers – is an important mode of growth.
In addition, the FAANG group has played an important role in combating the spread of coronavirus. Contract tracking tools developed by Apple and Google helped push the curve down somewhat. Facebook has helped people stay in touch amid the pandemic. Voice and video calls have more than doubled on Messenger and WhatsApp.
The FAANG shares returned 61.5% year-on-year, which is better than the S&P 500 rise of 16.9%.
Apple is the best artist, the alphabet worst
Apple is currently the best performing share among the FAANGs, thanks to the momentum for the services. The thorough adoption of Apple Watch Series 5 has helped the iPhone manufacturer to strengthen its presence in the personal health space. In addition, the company is benefiting from a solid demand for iPhone 5 supported by 5G. It is reportedly asking suppliers to increase production for the first half of 2021. The company’s extensive portfolio, which includes the Apple TV + streaming service, is also a major catalyst.
Amazon performed well in 2020 thanks to strong demand for e-commerce, retail efforts and strong Prime momentum. The company has benefited from a strong distribution network and Prime-enabled fast delivery services. Apart from grocery stores, the deepening of the focus on the fashion industry has also helped the growth. In addition, Amazon’s Amazon Web Services portfolio and services are a major catalyst.
Netflix’s solid content portfolio has helped it navigate the coronavirus stock market successfully in 2020, thanks to heavy investment in the production and distribution of localized, foreign language content and a growing international footprint. However, increasing competition in the electricity market is expected to jeopardize the prospects of the streaming giant.
Year-to-date performance
Meanwhile, despite the ongoing issues related to user data and privacy, along with the spread of fake news, terrorism-related content and political propaganda, Facebook’s user base continued to expand throughout the year. However, advertising sales were also hurt by the weak position in the travel and car industry in 2020. This is expected to hurt top growth, at least in the short term.
Alphabet is currently the weakest among the FAANGs. The company’s advertising growth slowed in 2020 due to the pandemic. Furthermore, the growing litigation issues and the increasing competition from Facebook in the US digital advertising market had the surplus on the share price movement. Nevertheless, Google’s robust mobile search and Alphabet’s focus on AI, cloud and home automation space were the biggest growth issues.
SaaS shares outperform FAANG
Although FAANG’s shares were impressive, there are a few SaaS shares (Software as a Service) that outperformed the group on an annual basis. Here we discuss five such stocks.
SaaS shares versus FAANG (year-to-date returns)
Zscaler The ZS share has risen 328.6% so far. It is one of the world’s leading providers of cloud – based security solutions. The company is increasing the demand for cyber security solutions due to a number of data breaches. Increasing demand for privileged access security for digital transformation and cloud migration strategies is a major growth driver.
Apart from this, the Edge cloud of the company for policy enforcement, multi-tenancy, proxy for SSL or TLS inspection and zero trust network access is strongly positioned to accept amidst the thriving work culture at a distance.
Furthermore, strong presence in vertical forms such as banking, insurance, healthcare, public sector, pharmaceuticals, telecommunications services and education is another important catalyst.
This portfolio strength of Zacks Rank # 2 (Buy) increases the competitive advantage and helps users to add. The Zacks consensus estimate for fiscal 2021 earnings has been up 27.6% over the past 60 days to 37 cents a share.
The commercial bank The TTD share has risen 221.2% so far. It is a provider of technological platform for advertising. Through the self-service, cloud-based platform, ad buyers create, manage and optimize data-driven digital advertising campaigns.
It benefits from the momentum in programmatic ad purchasing. Furthermore, the rise of digital content has strengthened the use of the company’s inventory in all forms of ConnectedTV. In addition, the recovery of the advertising demand and spending scenario is expected to be the best.
Clearly, spending on digital advertising surpassed traditional media buying last year. In addition, WNIP, referring to eMarketer, revealed that the digital advertising market is expected to reach only $ 225 billion in the United States by 2024. This reflects an increase of nearly $ 150 billion in estimated market value this year. This gives The Trade Desk enough room to expand, and marketers need to reach consumers outside of Google and Facebook.
The digital advertising business currently has a Zacks Rank # 1 (Strong Buy). You can see the full list of today’s Zacks # 1 Rank shares here.
The Zacks consensus estimate for its 2020 earnings has been revised up 58.4% over the past 60 days to $ 4.99 per share.
DocuSign DOCU has risen by 209.3% so far. It is a popular name for the verification of documents via the internet via electronic signature.
As businesses of all sizes have shifted their office staff for safety reasons to work-from-home arrangements, workplaces have adopted digital productivity tools to get things practically done. One product that has become the most important part of many businesses’ remote work toolbox is DocuSign’s time-saving e-signature application. A comprehensive set of cloud-based software tools can double the responsive market as the e-signature industry.
The stock, which currently has a Zacks rank of 3 (Hold), uses blockchain technology to enable customers to adapt to smart technology and digitize paper deals. The Zacks consensus estimate for its earnings in 2021 has been revised up 34.5% over the past 60 days to 74 cents a share.
Veeva Systems Inc. VEEV has risen 98.4% so far. It provides software-based software for the life sciences industry in North America, Europe, the Pacific, the Middle East, Africa and Latin America.
Its unique solutions include Veeva Vault, Veeva CRM, Veeva Network and Veeva OpenData. The cost-effectiveness of cloud-based applications on local applications attracts life science enterprises and is an important catalyst. The company continues to expand its market share and has several international expansions in CRM with existing customers.
This knowledge of Zacks Rank # 3 on various components of the life science industry helps him build purposeful products. The Zacks consensus estimate for its earnings in 2021 has been revised up 5.6% over the past 60 days to $ 2.83 per share.
Zendesk, Inc. ZEN has risen 82% to date. It is a cloud-based enterprise with a software portfolio focused on sales, support and customer engagement. The company started as a customer service cloud and now with Zendesk Sunshine it has become a complete platform for customer relationship management.
The platform is open and cloud based and can be easily integrated into other enterprise software. It offers omnichannel solutions to businesses so that they can meet their needs in the most convenient way. Zendesk has helped connect nearly 900 million customer queries with a solution over the past year.
The Zacks Rank # 2 company’s portfolio strength increases competitive advantage and helps users. The Zacks consensus estimate for its fiscal earnings in 2021 has been revised up 21.7% to 56 cents a share over the past 60 days.
Zacks Top 10 Shares for 2021
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Amazon.com, Inc. (AMZN): Free Inventory Analysis Report
Apple Inc. (AAPL): Free Stock Analysis Report
Netflix, Inc. (NFLX): Free Stock Analysis Report
Facebook, Inc. (FB): Free Inventory Analysis Report
Alphabet Inc. (GOOGL): Free Inventory Analysis Report
Zendesk, Inc. (ZEN): Free Inventory Analysis Report
Veeva Systems Inc. (VEEV): Free inventory analysis report
The Trade Desk Inc. (TTD): Free Inventory Analysis Report
DocuSign Inc. (DOCU): Free Inventory Analysis Report
Zscaler, Inc. (ZS): Free Inventory Analysis Report
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