It’s been a mixed bag of a year for the FANG stocks.
The once high flying Amazon (NASDAQ: AMZN), Netflix (NASDAQ: NFLX), and Google-parent Alphabet (NASDAQ: GOOGL, GOOG) are all down over the last twelve months by -14%, -30%, and -1.6%, respectively. While Facebook (NASDAQ: FB) is the only one of the four that is up over the last year, climbing just over 10% over the last twelve months.
And as the FANG stocks have struggled to break out to new highs, Piper Jaffray chief market technician Craig Johnson says it could put the breaks on the broader market.
“You can see here that like the market, they’re not breaking out to all-time highs. This has been leadership in the past. It’s not really leadership now,” Johnson said. “But if that’s not breaking out, it’s going to be a bit of a headwind for the market.”
But of the FANG names, Mark Tepper, president of Strategic Wealth Partners, says there’s one to stick with above the others.
“By far my favorite of the bunch is Amazon,” Tepper said.
According to Tepper, Amazon’s focus on e-commerce, cloud computing, and advertising makes it a must-own stock.
“From an e-commerce standpoint, nobody can match them when it comes to price and convenience,” Tepper said. “Yes, they’re spending some money right now on one-day shipping but that’s a short-term drag and that’s actually going to make them much, much stronger in the long run.”
Tepper also said that the company’s high-margin cloud and advertising businesses have helped drive its growth over the last few years.
Amazon, in Tepper’s view, could surge far higher from current levels.
“It’s trading in the mid-$1,700s right now. We think fair value is somewhere between $2,000 and $2,400 so plenty of upside here,” he said.
Amazon shares would have to move nearly 40% higher to reach Tepper’s $2,400 price target.
Tepper isn’t the only investor who loves Amazon stock now.
“I have close to a billion dollars in Amazon stock,” Cuban said. And his second biggest holding is Netflix, and “it’s been that way for years.”