Charts: Visualizing the Bear Market in FAANG Stocks
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Charts: Visualizing the Bear Market in FAANG Stocks

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Visualizing the Bear Market in FAANG Stocks

Visualizing the Bear Market in FAANG Stocks

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

What goes up, must come down.

Over recent years, there hasn’t been a safer bet than big tech – specifically the FAANG stocks, which include Facebook, Apple, Amazon, Netflix, and Google’s parent company Alphabet.

But in the financial world, this feeling of euphoria can be turned upside-down very quickly.

Since the summer, the five tech giants combined have lost close to $1 trillion in market capitalization from their peaks. Now the FAANG stocks have officially slipped into a bear market, with investors blaming rising interest rates, slumping sales forecasts, possible government intervention, and bubble-like valuations as reasons for the reversal in fortune.

The Damage Done

The generally accepted definition of a bear market is a 20% or greater decline from recent market highs.

Facebook and Netflix have been in bear territory for months, but the remaining members of FAANG only just recently capitulated. Apple was the last to go – but with -24% in lost value since its peak on October 3, it is now in trouble as well.

CompanyPeak valuation ($B)Current valuation ($B)Difference ($B)
Apple$1,103$839$264
Amazon$982$750$232
Facebook$628$385$243
Alphabet$894$722$172
Netflix$182$115$67
Total$3,789$2,811$978

Data based on publication time on Nov 23, 2018

Interestingly, this is the first time that the FAANG stocks have been in a bear market together, meaning this is uncharted territory for big tech and the wider market as a whole.

After the Gold Rush

While FAANG represents a small fraction of tech stocks available on the market, they do make up a significant percent of indices like the S&P 500 or the Nasdaq Composite. As a result, this slump can impact the rest of the market – and it manifests a more general malaise that other, less-beloved tech stocks must deal with.

Unsurprisingly, the Nasdaq Composite – a technology bellwether – is feeling the pain as well:

5 year composite index

The sentiment can also be seen in other tech names, some which have been slumping for awhile and others which have fallen into a funk only recently:

Even SaaS darlings like Salesforce.com can’t shake the trend – the stock entered bear territory itself on November 19th.

Tell Me Why

Why have investors soured, at least temporarily, on the tech stock universe?

There are multiple narratives floating around, but the general gist is something like this: the current bull market in stocks is nine years long, and at some point the party will come to an end. Because the FAANG stocks traditionally trade at very generous valuations, they are likely to come back down to earth as economic conditions deteriorate.

Further, the fears around FAANG stocks are seemingly being confirmed by recent news. For example, there are reports of Apple slicing orders for iPhones, a stagnant Facebook userbase, and other growth hurdles being experienced by these companies – and these reports are helping to fan the flames.

Some experts see the slump as an opportunity to load up on discounted tech heavyweights – while others, such as early Facebook investor Jason Calacanis, say it is possible that the social network has already experienced its “Yahoo peak” in terms of relevance and valuation.

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Visualizing the Critical Metals in a Smartphone

Smartphones can contain ~80% of the stable elements on the periodic table. This graphic details the critical metals you carry in your pocket.

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Visualizing the Critical Metals in a Smartphone

In an increasingly connected world, smartphones have become an inseparable part of our lives.

Over 60% of the world’s population owns a mobile phone and smartphone adoption continues to rise in developing countries around the world.

While each brand has its own mix of components, whether it’s a Samsung or an iPhone, most smartphones can carry roughly 80% of the stable elements on the periodic table.

But some of the vital metals to build these devices are considered at risk due to geological scarcity, geopolitical issues, and other factors.

Smartphone PartCritical Metal
Touch Screen indium
Displaylanthanum; gadolinium; praseodymium; europium; terbium; dysprosium
Electronicsnickel, gallium, tantalum
Casingnickel, magnesium
Battery lithium, nickel, cobalt
Microphone, speakers, vibration unit nickel, praseodymium, neodymium, gadolinium, terbium, dysprosium

What’s in Your Pocket?

This infographic based on data from the University of Birmingham details all the critical metals that you carry in your pocket with your smartphone.

1. Touch Screen

Screens are made up of multiple layers of glass and plastic, coated with a conductor material called indium which is highly conductive and transparent.

Indium responds when contacted by another electrical conductor, like our fingers.

When we touch the screen, an electric circuit is completed where the finger makes contact with the screen, changing the electrical charge at this location. The device registers this electrical charge as a “touch event”, then prompting a response.

2. Display

Smartphones screens display images on a liquid crystal display (LCD). Just like in most TVs and computer monitors, a phone LCD uses an electrical current to adjust the color of each pixel.

Several rare earth elements are used to produce the colors on screen.

3. Electronics

Smartphones employ multiple antenna systems, such as Bluetooth, GPS, and WiFi.

The distance between these antenna systems is usually small making it extremely difficult to achieve flawless performance. Capacitors made of the rare, hard, blue-gray metal tantalum are used for filtering and frequency tuning.

Nickel is also used in capacitors and in mobile phone electrical connections. Another silvery metal, gallium, is used in semiconductors.

4. Microphone, Speakers, Vibration Unit

Nickel is used in the microphone diaphragm (that vibrates in response to sound waves).

Alloys containing rare earths neodymium, praseodymium and gadolinium are used in the magnets contained in the speaker and microphone. Neodymium, terbium and dysprosium are also used in the vibration unit.

5. Casing

There are many materials used to make phone cases, such as plastic, aluminum, carbon fiber, and even gold. Commonly, the cases have nickel to reduce electromagnetic interference (EMI) and magnesium alloys for EMI shielding.

6. Battery

Unless you bought your smartphone a decade ago, your device most likely carries a lithium-ion battery, which is charged and discharged by lithium ions moving between the negative (anode) and positive (cathode) electrodes.

What’s Next?

Smartphones will naturally evolve as consumers look for ever-more useful features. Foldable phones, 5G technology with higher download speeds, and extra cameras are just a few of the changes expected.

As technology continues to improve, so will the demand for the metals necessary for the next generation of smartphones.

This post was originally featured on Elements

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Which Companies Belong to the Elite Trillion-Dollar Club?

Only a few companies have broken the 13-digit market cap barrier to join the $1T+ club. Who’s a member, and who’s hot on their heels?

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Which Companies Belong to the Elite Trillion-Dollar Club?

Just a handful of publicly-traded companies have managed to achieve $1 trillion or more in market capitalization—only six, to be precise.

We pull data from Companies Market Cap to find out which familiar names are breaking the 13-digit barrier—and who else is waiting in the wings.

Footnote: All data referenced is as of August 17, 2021.

The Major Players in the Game

Apple and Microsoft are the only two companies to have shattered the $2T market cap milestone to date, leaving others in the dust. Apple was also the first among its Big Tech peers to ascend to the $1 trillion landmark back in 2018.

CompanyValuationCountryAge of company
Apple$2.48T🇺🇸 U.S.45 years (Founded 1976)
Microsoft$2.20T🇺🇸 U.S.46 years (Founded 1975)
Saudi Aramco$1.88T🇸🇦 Saudi Arabia88 years (Founded 1933)
Alphabet (Google)$1.83T🇺🇸 U.S.23 years (Founded 1998)
Amazon$1.64T🇺🇸 U.S.27 years (Founded 1994)
Facebook$1.01T🇺🇸 U.S.17 years (Founded 2004)

Facebook dipped in and out of the $1T+ club in July 2021, and continues its capricious movement. With just 17 years under its belt, it’s the youngest company ever to reach this valuation milestone—though not without some wild rides along the way.

State-owned oil and gas giant Saudi Aramco is the only non-American company to make the trillion-dollar club. This makes it a notable outlier, as American companies typically dominate the leaderboard of the biggest corporations around the world.

Who Else Might Join the Trillion-Dollar Club?

Companies with a market capitalization above $500 billion are also few and far between. Within this next list of six companies, the world’s most valuable automaker Tesla is another strong candidate to eventually join the Four Comma Club.

As per usual, analyst views on Tesla are quite varied. That said, some on Wall Street are predicting that Tesla might reach $3 trillion in market cap within the decade, owing to significant current and projected demand for electric vehicles (EVs) and driverless systems.

CompanyValuationCountryAge of company
Tesla$659B🇺🇸 U.S.17 years (Founded 2003)
Berkshire Hathaway$655B🇺🇸 U.S.182 years (Founded 1839)
TSMC$576B🇹🇼 Taiwan34 years (Founded 1987)
Tencent$537B🇨🇳 China23 years (Founded 1998)
Visa$515B🇺🇸 U.S.63 years (Founded 1958)

Visa, one of the pioneers of consumer credit in the United States, continues to innovate even 63 years after its founding. In attempts to expand the reach of its already massive payments ecosystem, Visa is experimenting with acquisitions, and even dipping its toes into cryptocurrency with some success.

Whether the next company to join the trillion-dollar club comes from the U.S., from the tech industry, or out of left field, it’s clear that it has some pretty big shoes to fill.

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