Paul Meeks is a tech investor who identified FAANG stock that he wouldn’t buy despite the sector’s recent slump. Meeks said parts of FAANG’s business were “could have been in trouble.” The company in question is Amazon ecommerce giant whose shares dropped over 30% as of Thursday closing. E-commerce has seen a slowdown in America, and Amazon’s growth over the past few years is evident.” Meeks, portfolio management at Independent Solutions Wealth Management told CNBC’s “Street Signs Asia” on Thursday. His comments were blunt: “I wouldn’t recommend that stock as it has a huge cost ramp and the revenues are slowing.” Amazon Web Services is the best thing that could happen to this company. This is all fine, but I think that the ecommerce industry could be facing serious problems. Amazon published its quarterly revenue forecast in April that was below analysts’ expectations and showed the lowest quarterly growth rate ever since 2001’s dot com bust. He sees only three companies in Big Tech as he can stomach: Microsoft, Alphabet (Google-parent Alphabet), and Apple. Independent Solutions Wealth Management holds shares in these companies. Although shares in Meta Platforms, Facebook’s parent company, have fallen more than 40% this year and still look appealing at present levels Meeks expresses doubts about the future of the company due to the disruptions occurring within the digital advertising sector. The latest earnings report from the company shows that advertising makes up more than 95% for Meta’s total revenue. Snap, a social media company and digital ad firm owner warned investors on Tuesday that Snap won’t achieve its prior targets for adjusted earnings and revenue in the current quarter. This caused share prices to tumble. “The interesting thing about that whole space, those digital advertising models … won’t say they’re permanently impaired but they have been disrupted,” he said. “I do not know how Meta’s future business model will look. There have been huge expenditures made for the metaverse and I’m not even sure if that was their business model. Meta’s Reality Labs was the division of the company that tries to create products for the metaverse. It lost nearly $3 billion during the quarter. Meta’s CEO, in February, stated during earnings calls that he expected operating losses to increase “significantly” by 2022. Cybersecurity is a hot topic. Meeks stated that cybersecurity could be an industry which “accelerates its growth” in spite of geopolitical headwinds. Palo Alto Networks, which announced fiscal third quarter results surpassing analyst expectations, is a favorite of the investor. Meeks stated that he expects more from the company. Although this company may not be the most affordable, I feel confident that they will continue to grow and, in fact, their quarterly growth was 40%.
Paul Meeks, a tech investor and activist said that the FAANG stock was the one he’d currently avoid despite recent turmoil in the wider sector. He stated that parts of the FAANG business could be “in trouble.”
