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Abu Dhabi, UAEFriday 16 November 2018

Tech stocks battered after disappointing Amazon and Alphabet results

FANG stocks made of Facebook, Amazon, Netflix and Google hit with setback from weak results

Disappointing results from Amazon and Alphabet are latest setback to FANG stocks. REUTERS/File Photos/File Photo
Disappointing results from Amazon and Alphabet are latest setback to FANG stocks. REUTERS/File Photos/File Photo

So-called FANG stocks and other tech shares sank in extended trade on Thursday following disappointing quarterly reports from Amazon and Google parent Alphabet.

The weak results from Amazon and Alphabet were the latest setback for the high-growth quartet of stocks known as FANG, which also includes Facebook and Netflix.

Nasdaq futures NQcv1 fell 0.8 per cent and S&P futures EScv1 lost 0.5 per cent, suggesting the US stock market may see more selling when it opens on Friday.

Wall Street favorites in recent years, the FANG stocks have been punished in a month of volatility for US equities that has some investors worried a decade-old bull market may be ending.

The FANG group, along with heavyweight tech stocks Apple and Microsoft, have made outsized contributions to the S&P 500’s gains in recent years, and a prolonged downturn for those stocks would be a major setback for the market.

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After the bell, Amazon tanked 8 per cent. The fall came after the online retailer and cloud computing heavyweight reported that its quarterly net sales rose to $56.58 billion (Dh207.8bn) from $43.74bn a year earlier. That missed analyst estimates of $57.1bn, according to Refinitiv data.

Alphabet missed analysts’ estimates for third-quarter revenue, while rising expenses trimmed its operating margin for the third straight quarter, fanning concerns about regulatory scrutiny. Its stock fell 4.7 per cent.

Reacting after hours, Netflix dipped 3 per cent and Facebook, which reports results on October 30, lost 2.3 per cent.

During Thursday's official trading session, all four FANG stocks rallied by between 3 per cent and 7 per cent, regaining some of the territory lost in recent weeks during a broad market sell-off. The Nasdaq jumped 2.95 per cent, but remained down 10 per cent from its August record high close.

Apple fell 1.6 per cent after hours, while Twitter dipped 2.5 per cent. Earlier in the day, Twitter surged 15 per cent in its biggest one-day gain in a year after the social media company easily beat Wall Street’s revenue and profit estimates.

Snap slumped 11 per cent in extended trade after the Snapchat owner said its number of daily active users fell to 186 million in the third quarter from 188m in the June quarter, hurt largely by an app redesign and competition from Facebook’s Instagram.

Chipmaker Micron Technology lost 3.8 per cent in extended trade after Western Digital said it was taking steps to align its output of flash memory chips with projected weak demand. Western Digital dropped 8 per cent in extended trade.

Intel jumped 3.5 per cent in extended trade after posting one of Thursday’s few upbeat quarterly reports.