Many years ago, someone termed the new leadership in NASDAQ “FANG”… Facebook, Amazon, Netflix, and Google. Essentially the best of the new tech.
Over the last few years, that morphed into “FAAMG”… Apple and Microsoft got let into the group. While elder statesmen, there is no doubt that they deserve to be part of tech’s elite.
So powerful is this group that just those five stocks represent 20% of NASDAQ movements. That is incredible, if not incredibly unbalanced.
And it’s the performance of these five companies that have kept the NASDAQ index from falling like other popular indexes around the world.
For four out of the five companies, the performance has been merited.
We all have to stay at home and have things delivered to us? Geez, could it get any better for Amazon (AMZN)?
We all have to stay at home and use the cloud to do pretty much everything in our lives… like work… school… socializing… entertainment? That’s great news for cloud-based leaders like Facebook (FB), Microsoft (MSFT), and Google (GOOG).
So why am I separating Apple (AAPL) from the herd? After all, our mobile device is absolutely indispensable, right?
Yes, but will people without jobs… without income… scared and uncertain when the crisis will be over… line up for new iPhones come this fall?
I don’t think so.
That is, if there’s even an Apple Store open to line up in front of.
But it’s not just me. The other day I shared a KeyBanc’s report that iPhone sales in April have declined -77%.
-77%!
No other FAAMG’s business is taking a hit like this… to the contrary, all the other FAAMG’s businesses are being helped by the crisis.
It’s not Apple’s fault that the entire world just stopped. But it is investors’ fault if they invest in Apple right now. Because — right now — Apple is getting gutted.
So why is AAPL enjoying the same stock success as these others? To borrow a phrase from a past crisis: Irrational exuberance.
Ultimately reality wins.
Royal Blog 