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How FAANG Stocks Are Defying the Coronavirus Bloodbath

Latvia is planning to become one of the first countries to launch a coronavirus contact-tracing app using the new toolkit created by Apple, Inc. AAPL and Alphabet, Inc.’s GOOGL Google. Last week, Google and Apple released the initial version of their COVID-19 contact-tracing app. The companies said that authorities of 23 countries across five continents have sought access to their contact-tracing technology.

Tech players, particularly the FAANG companies, have been playing a major role in fighting the coronavirus. While most industries have taken a beating due to the coronavirus outbreak, tech players have been one of the few to have not only survived the pandemic but also put up a great show.

Latvia Takes the First Step

On May 20, Apple and Google made available the first public version of their exposure notification API, which originally debuted as a joint contact-tracing software tool. Contact-tracing apps initially launched in countries like Australia and Singapore didn’t taste much success because Apple’s iPhone does not support their approach to using Bluetooth short-range radio as a proxy for measuring the risk of infection.

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Latvia’s Apturi Covid (Stop Covid) app takes support of the technology launched last week by Apple and Google, whose iOS and Android operating systems run 99% of the world’s smartphones. However, the app would only work within Latvia at present.

FAANG Swimming Against the Tide

Once considered as nothing but risky high-growth tech stocks, FAANG players — Facebook, Inc. FB Apple, Amazon.com, Inc. AMZN, Netflix, Inc. NFLX and Google — have outperformed during the coronavirus pandemic and emerged as the lifeline for millions. At the very core of their success lies the kind of technology each player provides, ranging from products and services that have been helping businesses recover quickly from economic downturns or allowing people to work and learn from home other than finding entertainment.

The scene although was quite different till a few months back as many tech and Internet companies came under the scrutiny of regulators for their privacy policy. The pandemic has changed the graph completely, with the likes of Facebook fighting fake news, while Apple and Google helping in developing technology to fight COVID-19.

Netflix has emerged as one of the biggest sources of entertainment amid the lockdown, while Amazon is once again redefining the retail landscape with its strong command over e-commerce.

Apple was the first tech giant to make its presence felt in the fight against the deadly COVID-19. In March, the iPhone maker, in collaboration with the White House Centre for Disease Control (CDS) and the Federal Emergency Management Agency, launched an app and a website that allows users to do a self-screening for COVID-19. The app offers an online screening tool, information on the disease and guidance from the CDS on testing for coronavirus and emergency care. Following that, it collaborated with Google to design a contact-tracing technology to slow the spread of the novel coronavirus by tracking who a person has been in close contact with.

Apple’s expected earnings growth rate for the current year is 3.5%. The Zacks Consensus Estimate for current-year earnings has improved 1.2% over the past 30 days. Apple has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Google’s expected earnings growth rate for next year is 33.1%. The Zacks Consensus Estimate for current-year earnings has improved 1.1% over the past 30 days. Google has a Zacks Rank #3 (Hold).

Last month, Facebook rolled out a range of videoconferencing features including a new tool Messenger Rooms, which will allow users to host video calls of up to 50 people. The videoconferencing feature is an attempt to capitalize on the growing demand for video chats due to the lockdowns.

Also, the social media giant recently announced that it will ban ads and commerce listings selling medical face masks on its platforms including Instagram to stop people from exploiting the coronavirus emergency. Facebook’s expected earnings growth rate for the current year is 12.8%. The Zacks Consensus Estimate for current-year earnings has improved 1% over the past 30 days. Facebook has a Zacks Rank #3.

Netflix has been one of the biggest gainers during amid the lockdowns with record installs in the first quarter of 2020. The streaming giant added 15.8 million subscribers in the quarter, taking its global total to 182.9 million. The company had predicted that it would add around 7 million customers during the period. The company’s expected earnings growth rate for the current year is 55.5%. The Zacks Consensus Estimate for current-year earnings has improved 7.7% over the past 60 days. Netflix has a Zacks Rank #2.

Amazon has been a savior during the crisis with its strong online presence and delivery arm. The company also hired thousands of temporary workers at its warehouses to speed up delivery. In April, the e-commerce giant said it will be hiring 75,000 more heads ranging from warehouse staff to delivery drivers to meet the growing demand for online orders as millions of Americans stay quarantined in their houses for fear of getting infected by COVID-19.

Amazon is facing a daunting job of meeting online delivery orders. The e-commerce giant is at the same time trying to fill up the gap created by the high unemployment rate in the United States as more people continue to lose jobs amid the pandemic. Amazon’s expected earnings growth rate for next year is 94.8%. Its shares have gained 31.9% year to date. Amazon carries a Zacks Rank #3.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

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