The so-called FANG stocks take centre stage on Wall Street this week, with Amazon <AMZN.O>, Alphabet <GOOGL.O> and Facebook <FB.O> set to report as the S&P 500 approaches a record high.
The group of high-growth stocks that supercharged the S&P 500's decade-long rally in recent years has had mixed results in 2019, with Facebook and Amazon dramatically outperforming the broader market, while Netflix <NFLX.O> and Google-owner Alphabet have lagged.
Facebook reports on Wednesday after the bell, with Amazon and Alphabet on Thursday, all together accounting for 9% of the S&P 500's stock market value. Overall, companies reporting this week account for about 30% of the S&P 500's value.
Investors' reactions to those reports could affect broader market sentiment as the S&P 500 trades about 1% below its July 12 record high close, with investors widely expecting the Fed to cut interest rates later this month. The benchmark index was up 0.3% on Monday.
"I’m more concerned about how the reports from the likes of Alphabet and Facebook will affect my other tech stocks, because they suck the oxygen out of the room every time something happens to them," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma, which owns shares of Amazon and Alphabet.
Also reporting this week are chipmakers Intel <INTC.O>, Texas Instruments <TXN.O> and Xilinx <XLNX.O>, which will likely give investors fresh information about the impact of the U.S.-China trade war, the pace of 5G growth, and when a downturn in global semiconductor demand may end.
Netflix has tumbled 14% since Wednesday, when it reported weaker-than-expected subscriber growth. Facing an approaching wave of competition, the video streaming service is up 18% year to date, just below the S&P 500's 19% gain. Alphabet is up just 8% in 2019, while Amazon has surged 31%.
When Facebook reports, investors will focus on how the leading social network is responding to regulatory scrutiny of its handling of users' personal data, and how planned measures including a "Clear History" option may hurt advertising revenue.
Reflecting improved expectations, Facebook has surged 51% in 2019 and is 7% short of the record high it set a year ago, just before it warned of a multi-year squeeze on its business margins, sending its stock into months of decline.
Facebook’s June-quarter revenue is seen jumping 25% to $16.5 billion, with net income up 5% to $5.4 billion, equivalent to $1.87 per share, according to Refinitiv.
Analysts expect Alphabet’s quarterly revenue to climb 17% to $38.2 billion, with net income falling 4% to $7.9 billion. Analysts expect Amazon’s quarterly revenue to grow by 18% to $62.5 billion, with net income growing 11% to $2.82 billion.
