Pro: 2 FAANG stocks to buy and 1 to avoid
- Todd Gordon picks Apple Inc as the strongest of FAANG stocks right now.
- Boris Schlossberg chooses Alphabet over Apple as the strongest candidate.
- Gordon and Schlossberg agrees that Netflix is the weakest of FAANG stocks.
Rising inflation and the associated risk of higher interest rates weighed on the FAANG stocks this week. Facebook, Amazon, Apple, Netflix, and Google are still down by a minimum of 3% as the week comes to an end.
With the big cap tech stocks trading lower than at the start of the week, investors are interested in finding out if it’s a good buying opportunity – and, if so, where should they put their money right now.
Todd Gordon’s remarks on CNBC’s “Trading Nation”
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To that end, TradingAnalysis.com founder Todd Gordon said on CNBC’s “Trading Nation” that he sees Apple Inc. (NASDAQ: AAPL) as the best candidate scheduled for a swift rebound. Based on technical levels, Gordon recommends a stop-loss order on Apple that goes live below $116 (£82.27). The tech giant is currently exchanging hands at $127 per share.
On the flip side, Gordon said, Netflix is struggling the most after the streaming platform failed to meet its guidance for 6 million new subscribers in Q1. He said:
“They’re losing market share. They’re picking up competitors. I’m a little concerned.”
Netflix is underperforming compared to its biggest rival, Disney, as well as the benchmark S^P 500 index at large. Its market share in 2020 tanked 9% compared to the previous year.
Boris Schlossberg agrees with Gordon on Netflix
Boris Schlossberg of BK Asset Management agreed with Gordon on CNBC’s “Trading Nation” that Netflix might see further downside in the upcoming weeks.
Schlossberg saw rising competition, increased costs related to producing original content, and slower growth in subscribers as factors that will lead to an increased cash burn for Netflix in the upcoming month. He, however, clarified:
“It doesn’t mean that Netflix ultimately isn’t going to be the greatest, biggest global economic broadcast brand there is. But for now, it is the weakest of the bunch, and you definitely want to stay away from it on a relative strength basis.”
Schlossberg picked Alphabet Inc (NASDAQ: GOOGL) over Apple as the strongest among the FAANG stocks. He expressed confidence in the Google-parent’s fundamentals. Its ad business, as per Schlossberg, has also recovered quickly in recent months from the COVID-19 driven hit.
“I want to be long Google, short Netflix as the spread in the FAANG story.”
Alphabet is currently trading at $2,278 per share. In comparison, it had started the year 2021 at a much lower $1,726 per share.