As the nine-year bull market is injected with a wave of volatility in 2018, tech stocks have been on a bumpy ride on investors' fears regarding overall global market uncertainty, government regulation and a series of scandals. The recent weakness has resulted in a reordering of the rankings of some of America's largest firms, including FAANG stocks Amazon.com Inc. (AMZN) and Alphabet Inc. (GOOG). (See also: Facebook Is Facing Its Moment of Truth: Goldman.)
As e-commerce and cloud computing leader Amazon surges 35% year-to-date (YTD), versus search giant GOOG’s 4.7% gain, the Seattle-based retailer has surpassed its Silicon Valley tech rival in terms of market capitalization. Trading about flat on Wednesday morning at $1,097.31, Alphabet reflects a market cap of approximately $762.7 billion, a 32% gain over the most recent 12 months. AMZN, trading down 0.6% at $1,576.29, has returned about 35% to shareholders in 2018, reflected in a market cap at $764.4 billion.
Pushing Into New Industries
As Jeff Bezos' "everything store" threatens to disrupt traditional industries across media, apparel, health care, groceries and others, using its deep pockets, massive scale and customer reach, investors have driven shares up 87.5% over the most recent 12 months. By comparison, the S&P 500 has gained just 1.5% YTD and 15.8% over 12 months, while the Nasdaq Composite Index is up 6.7% in 2018 and has grown 27.2% over the past year.
The digital retail behemoth now only trails Cupertino, California-based smartphone maker Apple Inc. (AAPL) in terms of total market value. Trading down 0.7% at $174.09, AAPL reflects a 2.9% increase YTD, fully recovering from a sell-off last month driven by fears of slowing iPhone demand. As analysts applaud Apple's new focus on its software and services business, with segments such as Apple Music, Apple Care and the App Store, the Street has sent shares up 24.5% in the most recent 12 months. Meanwhile, Facebook Inc.'s (FB) plummet this week, in which the social media giant has seen over $50 billion wiped away from its market value and its stock suffer its worst day in four years, has pulled its market cap back below that of Warren Buffett's Berkshire Hathaway Inc. (BRK.A). (See also: Amazon at $1,900 Possible This Year: Goldman.)