Facebook and Amazon: intrusive, insatiable and invincible?
Social media site’s bounce-back from data row shows tech sector still soaring.
2 min read
Facebook’s share price has risen an astonishing 35% in US dollar terms since its lows during the Cambridge Analytica data scandal in March – the latest sign of a hugely resilient tech sector.
From an investment perspective, this shows the importance of taking a long-term view and having conviction even during tricky patches, as we have in technology which remains one of our favoured investment themes.
The sector bounced back faster from February’s stock market sell-off than any other industry. It has also recovered from other negative news, such as President Donald Trump’s criticism of Amazon on Twitter, without breaking a sweat.
It is led by the big household names Facebook, Amazon, Netflix and Google, known as the FANGs, but we prefer a more diversified investment approach.
Technology is a key driver of economic growth in the US, making up around a quarter of the S&P 500 index, and plays an important role in the current health of the global economy.
Other recent, jaw-dropping stats include:
Increase in Twitter's share price so far this year
Value of Spotify at its initial public offering in April
Increase in tech firm Nvidia's stock in the last 12 months
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Technology’s immense power to transform how we live is reflected in markets. For example, in the US we have seen attractively valued, highly profitable, cash-generating companies suffer share price falls due to the fear that Amazon is going to enter their business and take market share.
This “Amazonaphobia” has hit not just retail but healthcare too. The company announced a joint healthcare venture alongside Berkshire Hathaway and JP Morgan in January which triggered share price declines in health insurers and pharmaceuticals.
We examine the effects of technology on healthcare in our upcoming Mid-Year Outlook – The New Frontier – published on coutts.com on 4th July. It also takes a broader look at innovation and change in our world and what it means for investors.
Mohammad Kamal Syed, Head of Global Markets, says in the publication, “The pace of life is speeding up and the merger of human and digital is strengthening. At times, it can be unsettling. But – and it’s a big but – amongst all the change, we are seeing more opportunity and more innovation than ever before. It’s an exciting time to be alive.”
About Coutts Investments
With unstinting focus on client objectives and capital preservation, Coutts Investments provide high-touch investment expertise that centres on diversified solutions and a service-led approach to portfolio management. Our investment process is as disciplined as it is creative – ensuring tailored solutions with robust results.Discover More About Coutts Investments