FAANG+ Flatline

Nov 6, 2023

Earlier on X/Twitter, we highlighted the changing dynamics among the charts of the mega caps with Microsoft (MSFT) pressing towards a new all-time high, leaving the likes of Apple (AAPL) in the dust. Looking more broadly at the mega caps, below we show the relative strength of the mega caps proxied by the NYSE FAANG+ Index versus the S&P 500 over the past five years.  As shown, the early days of the pandemic were a boon for these mega caps, however, that faded from late 2020 through about a year ago.  While mega caps have outperformed again this year—and as a result have been the stocks to thank for the bulk of the S&P 500’s gains year to date—the past few months have seen that relative strength wane with the line fairly flat since the late spring.

Below, we show the how the mega-caps individually have been trading relative to the FAANG+ index.  Similar to what we noted in our aforementioned post, Apple (AAPL) has been underperforming with a downtrend in its relative strength line throughout the past year. Meanwhile, Microsoft (MSFT) has seen its relative strength rip higher.

As for the other FAANG+ stocks, there has not been the same sort of dramatic moves of late. That said, Amazon’s (AMZN) relative strength has been consistently declining for a multiyear span now. Meta Platforms (META) would have been in a similar boat, but its relative strength turned around and began trending higher over the past year.  Similarly, two semiconductor giants, NVIDIA (NVDA) and Broadcom (AVGO) have had long-term rising relative strength lines with a dramatic acceleration in NVDA over the past year.  Finally, we would note that Tesla (TSLA), which once boasted the highest degree of outperformance of the FAANG+ stocks, has recently seen its relative strength line move sideways in a choppy manner.