When Meta (META) lost over half its value in the last year, it was not alone among the FAANGM group. Amazon (AMZN), Apple (AAPL), Google/Alphabet (GOOG), and Microsoft (MSFT) joined the sell-off. Netflix (NFLX) fell the earliest but also rebounded soon thereafter.
Now that FAANGM sounds like the “nifty fifty” from the 1960s and 1970s after performing poorly, investors have one to consider buying.
Between Microsoft (MSFT) and Google (GOOGL), investors might choose Microsoft first. The software giant’s cloud-based subscriptions are must-haves. Customers cannot find a substitute for Office 365. Corporations are better off with Azure enterprise solutions to work alongside the Office suite.
Azure will pressure Amazon AWS in 2023.
Google is very attractive at a P/E in the high teens. The stock potentially bottomed at $85. Still, the company hired too many staff. YouTube faces serious pressure from TikTok. Young users are spending more time and creating more content on TikTok instead.
Google did not innovate its search engine much in the last two years. Its revenue depends on advertising, which is falling. ChatGPT, an AI, is an existential threat. For now, AI cannot scale, so it will not hurt Google.com yet. But once the creators find a way to bring real-time AI search, Google must be ready.
