Facebook isn't a tech stock any more. Neither is Google or Netflix.
At least that's the view of S&P Dow Jones, the group that classifies stocks into various sector groups that investors around the world track and monitor in their private and public portfolios. S&P Dow Jones is overhauling its Global Industry Classification Standard, with the changes taking effect Monday, and more than a few big name stocks are set to move from their original labeling in the biggest shake-up since the dot-com bubble.
Facebook Inc. (FB) - Get Meta Platforms Inc. Class A Report is set to move from the S&P's "Information Technology" sector to a newly-revamped "Communications Services" sector index, a decision that reflect's the social media company's reliance on advertising revenues over technological advancements.
"The last several years have seen an evolution in the way we communicate and access entertainment content and other information," S&P Dow Jones said when it first flagged the changes last year. "This evolution is a result of integration between telecommunications, media, and internet companies."
"(Reclassification) is a step towards acknowledging the convergence of telecommunications, media, and select internet companies and the overlapping services rendered by these companies, within the GICS Structure," the group added.
Google parent Alphabet Inc. (GOOGL) - Get Alphabet Inc. Class A Report , is also set to shift out of the tech basket into the Communications Services index. along with micro-blogging website Twitter Inc. (TWTR) - Get Twitter, Inc. Report , payments system pioneer PayPay Holdings (PYPL) - Get PayPal Holdings, Inc. Report and instant messaging app Snap Inc. (SNAP) - Get Snap, Inc. Class A Report
Some big consumer discretionary names are also on the move, S&P Dow Jones has said, with online streaming service Netflix (NFLX) - Get Netflix, Inc. Report moving from the Consumer Discretionary basket to Communications Services, along with Walt Disney Co. (DIS) - Get Walt Disney Company Report , Viacom Inc. (VIAB) - Get Viacom Inc. Class B Report and 21st Century Fox (FOXA) - Get Fox Corporation Class A Report . Amazon Inc. (AMZN) - Get Amazon.com, Inc. Report , will remain in the Consumer Discretionary group.
Collectively, the sector overhaul is likely to reduce the weighting of tech stocks in the S&P 500 from its current level of 20% to around 15%.
Apple Inc. (AAPL) - Get Apple Inc. Report , the worlds biggest company, will remain in the S&P Information Technology index and will comprise around a fifth of the new benchmark's weight as of Monday, rising from its current 16% weighting.
The changes will also ripple through the $4.4 trillion global exchange tradeed funds market as asset managers move billions in stocks to reflect the newly-classified S&P Dow Jones classifications.
(Editor's Pick. Originally published Sept. 21.)