3 FAANG Stocks JPMorgan Loves for 2022
The stock market has been volatile as COVID-19 omicron-variant-fueled pessimism reigns. Nevertheless, JPMorgan (JPM) expects FAANG stocks Amazon (AMZN), Meta Platforms (FB), and Netflix (NFLX) to soar in price in...
The stock market has been volatile as COVID-19 omicron-variant-fueled pessimism reigns. Nevertheless, JPMorgan (JPM) expects FAANG stocks Amazon (AMZN), Meta Platforms (FB), and Netflix (NFLX) to soar in price in 2022. Read on.
Over the past few weeks, the stock market has been volatile on concerns over the rapidly spreading omicron COVID-19 variant. According to the U.S. Centers for Disease Control and Prevention data, the omicron variant now accounts for 73% of U.S. coronavirus infections. In addition, Sen. Joe Manchin, a conservative Democrat, said on December 19 that he wouldn’t support the Biden administration’s ‘Build Back Better’ plan, dashing investor hopes surrounding the bill.
However, according to a FactSet report, the S&P 500 will close at or above 5,000 by 2022. Given this backdrop, we think it could be wise to invest in FAANG stocks on their market dominance and stable growth. According to a Seeking Alpha article, JPMorgan Chase & Co. (JPM) analyst Doug Anmuth said in a note to investors on December 15 that e-commerce and subscription-based names are preferable to online advertising, given the reacceleration of growth, and “an overall more favorable operating environment.”
FAANG members Amazon.com, Inc. (AMZN), Meta Platforms, Inc. (FB), and Netflix, Inc. (NFLX) are among the top internet stocks listed by JPM for 2022. So, we think it could be wise to add these stocks to your watchlist.
Amazon.com, Inc. (AMZN)
Famous online retailer AMZN in Seattle, Wash., offers a variety of products and services through its platforms. The company’s products include merchandise and content that it purchases for resale from vendors and those offered by third-party sellers. In addition, it provides electronic devices, such as Kindle, Fire tablet and Fire TV, Echo, Ring, and it also develops and produces media content, which it publishes on its membership only Amazon Prime.
On December 2, AMZN’s AWS launched AWS Cloud WAN. This managed wide area network service makes it faster and easier for enterprises to build, manage and monitor a unified global network. This launch could help boost the company’s revenue.
AMZN’s net sales for the third quarter, ended September 30, 2021, increased 15% year-over-year to $110.81 billion. The company’s net sales from AWS increased 38.8% year-over-year to $16.11 billion. For the nine months ended September 30, 2021, its net income increased 35% year-over-year to $19.04 billion.
Analysts expect AMZN’s revenue for its fiscal year 2021 to increase 21.9% year-over-year to $470.52 billion. Its EPS for its fiscal year 2022 is expected to grow 25.8% year-over-year to $51.50. Also, it has surpassed the Street’s EPS expectations in three of the trailing four quarters. Over the past nine months, the stock has gained 8.6% in price to close yesterday’s session at $3,341.58.
Meta Platforms, Inc. (FB)
Formerly known as Facebook, Inc., FB in Menlo Park, Calif., focuses on building products that enable people to connect and share through mobile devices, personal computers, virtual reality headsets, and in-home devices. Its segments include Family of Apps (FoA) and Facebook Reality Labs (FRL). While its FoA segment includes Facebook, Instagram, Messenger, Whatsapp, and others, its FRL segment consists of augmented and virtual reality-related consumer hardware, software, and content.
On December 16, the town of Zeewolde approved FB’s plan to build the largest data center in the Netherlands. The data center will run on green energy and is expected to use 1.38 GWh of electricity. The facility will likely help FB serve Facebook, Instagram, and Whatsapp users across Europe.
For its third quarter, ended September 30, 2021, FB’s revenue increased 35% year-over-year to $29.01 billion. The company’s net income increased 17% year-over-year to $9.19 billion. In addition, its EPS came in at $3.22, representing a 19% year-over-year rise.
For its fiscal 2021, analysts expect FB’s EPS and revenue to increase 38.2% and 36.9%, respectively, year-over-year to $13.94 and $117.68 billion. It surpassed consensus EPS estimates in each of the trailing four quarters. The stock has gained 19.1% year-to-date to close yesterday’s trading session at $325.45.
Netflix, Inc. (NFLX)
Famous streaming entertainment service provider NFLX in Los Gatos, Calif., operates subscription-based streaming memberships in more than 190 countries. The company acquires, licenses, and produces content, including original programming.
On December 14, NFLX announced that it was cutting subscription plan rates in India to grow its customer base in the highly lucrative market. With this decision, the company expects to undercut the competition and vie for a more significant market share.
NFLX’s average revenue per member increased 7% year-over-year to $11.65 for its third quarter ended September 30, 2021. Its total revenue increased 16.2% year-over-year to $7.48 billion, while its net income increased 83.4% year-over-year to $1.44 billion. In addition, its EPS came in at $3.19, up 83.3% year-over-year.
Analysts expect NFLX’s EPS and revenue for its fiscal 2021 to increase 76.6% and 18.9%, respectively, year-over-year to $10.74 and $29.71 billion. Over the past six months, the stock has gained 18.5% in price to close yesterday’s trading session at $593.74.
AMZN shares were trading at $3,378.08 per share on Tuesday afternoon, up $36.50 (+1.09%). Year-to-date, AMZN has gained 3.72%, versus a 24.59% rise in the benchmark S&P 500 index during the same period.
Amazon.com, Inc. (AMZN), Meta Platforms, Inc. (FB), and Netflix, Inc. (NFLX) are a part of the Entrepreneur Index, which tracks some of the largest publicly traded companies founded and run by entrepreneurs.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.