We think China’s crackdown on its big tech companies has the potential to enhance the growth of fundamentally strong FAANG stocks Apple In. (AAPL), Alphabet Inc. (NASDAQ:GOOGL) and Facebook (NASDAQ:FB). Conversely, we think U.S. antitrust concerns and decelerating growth make Amazon.com (NASDAQ:AMZN) and Netflix (NASDAQ:NFLX) best avoided now. So, read on to learn more.FAANG stocks represent some of the biggest technology companies in the United States, which have historically been some of the favorites of institutional and retail investors. These large-cap tech companies capitalized on the pandemic-driven disruption last year to boost their market presence significantly. Wedbush’s Dan Ives expects the recent federal crackdown against big techs in China to bolster the growth of tech stocks in the United States.
The tech industry is expected to grow at a 7% to 10% rate this year. Given this backdrop, fundamentally sound FAANG companies Apple Inc. (NASDAQ:AAPL), Alphabet Inc. (GOOGL), and Facebook, Inc. (FB) are well-positioned to witness stable growth and, thus, are solid bets now.
However, similar to China, the Biden administration also plans to stimulate further competition and stop further consolidation in the U.S. tech industry, which may not bode well for Amazon.com, Inc. (AMZN). Also, the decelerating growth prospects of Netflix, Inc. (NFLX) amid intense competition in the OTT space could lead to the stock witnessing a downtrend. Thus, we think these two FAANG stocks are best avoided now.