FAANG angst is back with a vengeance.
This week, each of the FAANG stocks tumbled into bear market territory, shedding more than $1 trillion in collective value off their recent highs.
"It is very hard to call a bottom in FAANG, as these companies are driven by different end markets and fundamental factors," said Andrew Braun, a portfolio manager at Pax World Funds. "The recent volatility in FAANG has been disproportionately driven by weakness in Apple and its suppliers."
Among the FAANGs, Apple (AAPL) - Get Apple Inc. (AAPL) Report has slumped in recent days alongside reports of lackluster iPhone demand, Facebook (FB) - Get Facebook, Inc. Class A Report is facing ongoing criticism that management is not in control of its business and Amazon's (AMZN) - Get Amazon.com, Inc. Report stock has faltered since the company issued weaker-than-expected guidance for the fourth quarter. Irrespective of their individual strengths and weaknesses, however, investors are generally taking a more critical look at the sky-high valuations of the popular FAANG names, according to Brian Sterz of wealth management group Miracle Mile Advisors.
"A lot of what we're seeing is a re-reading of what the valuations should be," Sterz said. "Amazon is a great company, and AWS is a phenomenal business -- but in a shaky economy, is that worth a 100 or an 85 [price-to-earnings multiple]? It's hard to sustain those high valuations when things get tricky."
Netflix (NFLX) - Get Netflix, Inc. (NFLX) Report , which traded at a 96 price-to-earnings multiple as of Nov. 20, is another case: "Should it trade at 80 or 100 P/E? That's a big spread," Sterz added.
Without knowing what's in store for the broader markets -- trade tensions and rising interest rates are just two of the issues sparking market volatility in recent weeks-- it may be tough to predict what's in store for the FAANG stocks as a group, or whether they'll continue to dominate the market in the same manner going into 2019 and beyond.
"I think if we do see the beginning of a downturn, whether it's FAANG or other highly-valued names, they do have more room to come down. I'd kind of lean on that," Sterz added. "And that's not to say that their businesses aren't good."