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Stocks: Apple Shares Buck Weakness in FAANGs -- WSJ

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10/12/2019 | 02:48am EST

By Paul Vigna

The past year has been a mixed bag for the popular "FAANG" stocks, but one of the "A's" is back on track.

Shares of Apple Inc. rose 2.7% to $236.21 Friday, setting an all-time closing high. After a brutal selloff last fall, the stock has surged about 64% from its 2019 low of $142 set on Jan. 3.

For most of last year, all the FAANGs were rising. Facebook Inc., Amazon.com Inc., Netflix Inc. and Alphabet Inc. all set records in the second half of 2018. Most have fallen since then, though.

Facebook is down about 15% since hitting a high of $217 in July. Amazon is down about 15% from its September 2018 high of $2,039. Netflix is down 32% since hitting a record $419 in July 2018. Alphabet hit a record high in July 2018, slid into 2019, set another new high in April -- and is down 6% since then.

These highly profitable, high-profile names have propelled most of the market's gains in recent years, spurring CNBC's Jim Cramer to coin the "FANG" moniker in 2013. More and more, they have been treated as parts of a whole, and that trading pattern has grown as some exchange-traded funds focused on tech stocks have become FANG proxies.

Apple was unofficially "added" to the FANG group in 2017, resulting in the ungainly new nickname FAANG. But it's different from the others not just because of its late addition.

The first four companies are mainly software companies. Apple has software, too, but is really more of a hardware company. What makes that hardware even more valuable is if Apple can put compelling software on it, and that's where Apple may take a big bite out of some of its FAANG siblings.

Apple TV is set to launch in a few weeks, putting the company into direct competition with Netflix and Amazon, as well as companies like Walt Disney Co. and CBS Corp. With about 900 million iPhones out there, Wedbush Securities analyst Daniel Ives figures Apple could probably get about 100 million consumers using its streaming service over the next three to four years.

That would add about $15 a share to Apple's bottom line and, along with demand for new iPhones, make the stock itself more valuable. Mr. Ives raised his target price to $265 from $245.

Write to Paul Vigna at paul.vigna@wsj.com

Stocks mentioned in the article
ChangeLast1st jan.
ALPHABET 0.31% 1301.22 Delayed Quote.24.14%
AMAZON.COM -0.99% 1760.35 Delayed Quote.17.96%
APPLE INC. 0.86% 264.28 Delayed Quote.66.07%
CBS CORPORATION -1.48% 37.195 Delayed Quote.-13.63%
FACEBOOK -0.65% 193.33 Delayed Quote.48.35%
NETFLIX -2.32% 285.14 Delayed Quote.9.10%
S&P 500 0.13% 3096.08 Delayed Quote.23.14%
WALT DISNEY COMPANY (THE) 4.60% 145.14 Delayed Quote.24.71%
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