FAANG stocks get all the attention in the S&P 500. But some off-the-radar tech-related stocks are putting up massive gains impossible to ignore anymore.
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Eight up-and-coming or resurging tech or communications services companies not in the S&P 500, including Dell Technologies (DELL), Snap (SNAP) and Epam Systems (EPAM), added more than $5.4 billion in market value apiece this year so far, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. These gains are bigger than more than 90% of the gains by S&P 500 stocks this year.
And these smaller companies' rises are challenging some of the so-called FAANG stocks' this year. "While Amazon.com (AMZN) and Netflix (NFLX) were two primary beneficiaries of the Covid lockdowns last year, their rallies stalled out last summer as investors started looking ahead to a fuller re-opening," says Bespoke Investment Research.
The biggest S&P 500 disappointment of them all? Apple (AAPL). The iPhone maker's market value is down 4.2%, or $121 billion this year, a bigger market value drop than any .
S&P 500 FAANGs Lack A Bite
You can't underestimate how important the FAANGs are the S&P 500. But don't overlook what's going on under the surface either.
As a group the FAANG stocks, Facebook (FB), Amazon.com, Apple, Netflix and Google parent Alphabet (GOOGL), account for nearly 15% of the market value of the entire stock market. The market is measured as the sum value of all stocks in the S&P 500, S&P Midcap 400, S&P SmallCap 600 and S&P Completion indexes.
And yet, some of their lagging performances this year are noteworthy. Shares of Apple, the most valuable S&P 500 company, are down 4.2% this year even following a 1% gain Monday.
But it's not alone. Netflix, one of the best stocks of many generations, are struggling. They're down 7% this year, wiping out nearly $16 billion in market value. And then there's Amazon. The superstar online retailer's shares are down 0.4% this year. The company's market value is only $2.3 billion higher since it aggressively bought back shares. Should you buy Amazon stock now?
"Two of the biggest winners from the Covid lockdowns just over a year ago were Amazon.com and Netflix," Bespoke said. "As parts of the country started to re-open last summer and the market started looking ahead to a fuller re-opening, the rallies in both of these stocks ran out of steam, and they started what are now long-term periods of consolidation."
And not many of the giants are getting a run for their money.
Dell Technologies: Putting Most Of The S&P 500 To Shame
Dude, I'm buying Dell stock.
It's been years since Dell was a hot stock. But it's here again. Dell Technologies, a Texas-based maker of computing products, isn't even in the S&P 500, S&P 400 or S&P 600 indexes. But its shares are up more than 36% this year. That gain put more than $21 billion of wealth into investors' pockets this year. That more than investors made on 491 out of the S&P 500 stocks, including rivals Apple and IBM (IBM). Shares of IBM are up 15% this year, adding $17 billion in market value.
Analysts say Dell's profit will dip 0.3% this year to $7.98 a share due to selling off some units. But profit is seen rising 5% in 2023 and nearly 10% in 2024.
Snap: Showing It's Not Just A Facebook Clone
Social media company Snap lived its whole life in Facebook's shadow. But now it's showing it can throw its weight around, too.
The company's stock is up more than 20% this year so far. That tops the 18.8% gain in Facebook shares this year. Snap's gain adds nearly $17 billion in market value to make the company worth $91.6 billion. True, Facebook's value is up more, $142 billion to $920 billion. But Snap's market value rise is more than that of roughly 98% of the S&P 500. Is Snap stock a buy now?
And then there's resurgent movie theater chain, AMC Entertainment (AMC). It's not a tech stock per se, but it's in the communication services sector. And it's up more than 500% this year, turning a $10,000 investment at the start of the year into a small fortune.
It's possible all the FAANG stocks will wake up from their "nap," as Bespoke puts it. But in the meanwhile, some new competition is coming on fast.
Companies Giving FAANG A Run For The Money
Largest market value gains in tech-related stocks outside of the S&P 500 in 2021 so far
| Company | Symbol | Stock % ch. YTD | YTD market value gain ($ millions) | Sector | Composite Rating |
|---|---|---|---|---|---|
| Dell Technologies | (DELL) | 36.6% | $21,521.7 | Information Technology | 85 |
| Snap | (SNAP) | 20.1% | 16,988.9 | Communication Services | 88 |
| VMware | (VMW) | 15.6% | 9,079.0 | Information Technology | 64 |
| EPAM Systems | (EPAM) | 35.2% | 7,260.0 | Information Technology | 99 |
| AMC Entertainment | (AMC) | 545.3% | 6,886.2 | Communication Services | 57 |
| IAC/InterActiveCorp | (IAC) | 33.4% | 6,359.7 | Communication Services | 90 |
| Marvell Technology | (MRVL) | 0.2% | 6,055.7 | Information Technology | 67 |
| HubSpot | (HUBS) | 27.9% | 5,495.9 | Information Technology | 81 |
Sources: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter@mattkrantz
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