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Even though global supply chain constraints, high inflation, and labor shortage could mar the technology industry’s growth in the near term, FAANG, which represents Meta (formerly known as Facebook), Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Netflix, and Alphabet (NASDAQ:GOOGL) (GOOG) (formerly known as Google), is gaining attention after reporting strong third-quarter results. While the Federal Reserve doubled the rate at which it is tapering its asset purchases and expects three interest rate hikes next year, the benchmark interest rates remain unchanged for now and should act as a growth catalyst in the near term. Furthermore, increasing demand for advanced tech products and services amid the accelerating digital transformation should keep driving the technology industry’s growth. According to GoRemotely, the U.S. tech industry is expected to reach a market value of $5 trillion by the end of 2021. Therefore, both FB and NFLX should benefit.
FB’s stock has gained 21.7% in price over the past year, while NFLX has returned 14.5%. Also, FB’s 24.3% gains over the past nine months are higher than NFLX’s 15.4% returns. And FB is the clear winner with 22.2% gains versus NFLX’s 10.6% returns in terms of year-to-date performance.
