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FAANG meltdown: Tech stocks open on a positive note after a bumpy season

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Wall Street's top tech stocks group have taken big hits this earning season, causing a stark difference in share prices across the board. However things seemed to pick up as markets opened in the US this afternoon, as falling prices pulled back on a bad week.

The so-called FAANGs group – consisting of Facebook, Apple, Amazon, Netflix and Google – have had a mixed 2018 to date after Facebook and Netflix reported disappointing results that caused their share prices to plummet, while Apple and Google have pulled ahead from the pack.

All five tech stocks opened on a positive note this morning, with minor starting gains of between 0.5 and two per cent bucking the recent downturn for the S&P 500 index's top performers.

Social media giant Facebook, alongside fellow tech favourite Twitter, experienced share price plunges of 20 per cent on reporting their second quarter results last week, while Netflix dropped 15 per cent as the first to report this season.

Read more: Facebook's share price plunges, losing over $120bn off its market value

Google, which is owned by parent company Alphabet, beat analyst expectations at the start of last week with a 26 per cent increase of its revenue compared to the same period in 2017.

Meanwhile, Amazon closed the week with a bumper set of results which doubled consensus estimates on profits, despite missing predictions on revenue.

All eyes are now set on Apple, which is scheduled to report its third quarter results after markets close tonight. Though revenues are usually smaller for Apple at this time of year as customers await the release of new iPhones in September, investors are on tenterhooks to see if the company could overcome the trillion-dollar valuation milestone.

Read more: AirPods, iPhones and Apple Music: What to expect from Apple's results

Freddie Lait, the founder of Latitude Investment Management, suggested the trend of tech stocks pulling ahead together is "finally coming to an end" after such a polarising season.

"The FAANGs are being divided and, in our view, should no longer trade as a group given the stark differences between the individual businesses," he added.

Ken Odeluga, a market analyst at City Index, said: "With the technology-focused Nasdaq index down for a third session on Monday, stakes for the biggest release in the sector are high.

"Apple earnings out tonight will go a long way to deciding stock market direction for the remainder of the week and beyond."

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