Netflix was the best-performing tech stock in Q1
Despite all odds, FAANG (Facebook, Amazon, Apple, Netflix, and Google) stocks performed pretty well in the first quarter of 2019, outperforming the S&P 500 Index (SPY) with the exception of Alphabet (GOOG). Netflix (NFLX) was the best-performing FAANG stock in the first quarter, climbing 39.2%. Facebook, Apple, Amazon, and Google-parent Alphabet returned 27.2%, 20.4%, 15.5%, and 13.3%, respectively. Meanwhile, the broad S&P 500 Index had one of its best quarters ever, rising 13%.
Semiconductor stocks were some of the best-performing stocks in the sector. Xilinx (XLNX) rose 49%, while AMD (AMD) rose 38.2% in the first quarter. Meanwhile, Snapchat-parent Snap (SNAP) was one of the best-performing tech stock, rising exactly 100% in the first quarter. Cloud communication company Twilio (TWLO) continued on its relentless rise, surging over 44% in the first quarter. The stock has surged by a jaw-dropping 427% since February 2018.
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While the US-China situation has eased, other risks remain
These tech giants, along with most tech stocks, tanked for most of the fourth quarter of 2018, as investors got increasingly wary about expanding valuations, increasing interest rates, political risks, a global slowdown, and slowing earnings growth.
Stocks rebounded in the first quarter due to a dovish stance by the Federal Reserve. However, most of these threats still remain. Recently, stocks got a boost after US-China tensions eased.
Most FAANG stocks have been showing signs of slowing down in the last two quarters and have a conservative outlook for 2019, so they might not be able to continue to rally as much as they did in the first quarter.
Meanwhile, fast-growing companies like Twilio seem extremely crowded, as investors have been ready to pay a higher premium to buy fast-growing tech stocks, which has made finding value within the tech sector even more difficult.