The FAANG stocks notched significant gains in 2019 but there’s reason to still be optimistic about their performance in 2020, according to Wedbush tech analysts Daniel Ives.
Ives wrote in a note on Monday morning that the development of several “transformational” trends such as 5G, cloud computing, autonomous driving and the proliferation of streaming content platforms could generate momentum for tech stocks in general in 2020, and the FAANG stocks in particular.
He also predicted that regulatory concerns for the FAANG stocks would result in fines in 2020, but not significant changes to any of the companies’ business models. And he also expected Google (GOOGL) - Get Report, Amazon (AMZN) - Get Report and Apple will further expand into both healthcare and banking as a means of broadening their businesses and expanding their consumer product footprints.
As far as the cloud goes, Ives wrote that he expects that Microsoft (MSFT) - Get Report, fresh off its win of the Department of Defense’s JEDI contract, will win the next stage of the cloud war versus Amazon, and that Google will potentially make a major acquisition of a public cloud vendor to catch up to Microsoft and Amazon.
In the streaming space, Ives sounded some caution for Netflix (NFLX) - Get Report, writing that the growth of Disney's (DISNEY) new Disney+ platform will help disrupt 10% or more of Netflix’s installed base.
And with respect to Tesla (TSLA) - Get Report, Ives believes that the electric vehicle maker will find success in China and “potentially hit the key 100k delivery number quicker than the US/Europe trajectory and be a demand tailwind.” Ives also predicted that 2020 will be the year that autonomous driving starts to become a reality.