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2 FAANG Stocks With Up to 79% Upside, According to a Pair of Wall Street Analysts

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2 FAANG Stocks With Up to 79% Upside, According to a Pair of Wall Street Analysts

When volatility and uncertainty pick up on Wall Street, investors of all walks tend to turn their attention to profitable, time-tested, industry-leading businesses. For much of the past 10 years, it’s the FAANG stocks that have been investors’ safety net.

When I say “FAANG stocks,” I’m referring to:

  • Facebook, which is now a subsidiary of Meta Platforms (META -4.17%)
  • Apple (AAPL -1.35%)
  • Amazon (AMZN -5.58%)
  • Netflix (NFLX -0.60%)
  • Google, now a subsidiary of Alphabet (GOOGL -9.51%) (GOOG -9.60%)

Image source: Getty Images.

Aside from handily outperforming the benchmark S&P 500 over the past decade, the FAANG stocks bring well-defined competitive advantages to the table.

  • Meta Platforms owns some of the top social media “real estate” on the planet. Collectively, Facebook, WhatsApp, Instagram, and Facebook Messenger encouraged nearly 3.9 billion people to visit a Meta-owned asset each month during the June-ended quarter.
  • Apple is the largest publicly traded company by market cap in the U.S. and the leading provider of smartphones domestically. It’s also the king of capital-return programs, with Apple repurchasing around $600 billion worth of its common stock since the start of 2013.
  • Amazon is the world’s leading online retail marketplace and is responsible for bringing in roughly $0.40 of every $1 spent in online retail sales in the United States. Further, Amazon Web Services (AWS) is the leading cloud infrastructure service provider by total spending.
  • Netflix is the world’s leading streaming content provider by market share. Among streaming services, none comes close to the library of original content Netflix can offer.
  • Alphabet’s Google is a virtual monopoly in internet search. It held a nearly 92% share of worldwide internet search share, as of September 2023. Alphabet is also the owner of streaming video platform YouTube, the second-most visited site behind Facebook.

But despite their dominance, Wall Street’s outlook for the five FAANG stocks differs significantly. According to the high-water price targets from a pair of Wall Street analysts, two FAANG stocks offer as much as 79% upside.

Alphabet: Implied upside of 54%

The first FAANG stock with jaw-dropping upside, at least according to one Wall Street analyst, is Alphabet. Analyst Ross Sandler at Barclays maintained a buy rating on shares of the company in September, with an aggressive price target of $200. When accounting for Alphabet’s after-hours move at the time of this writing on Oct. 24, 2023, Sandler’s price target would result in a 54% gain.

Arguably the biggest headwind that could keep Alphabet from reaching the highest-issued price target on Wall Street is the health of the U.S. economy. With a number of economic data points and predictive tools suggesting a recession is on the horizon, ad-driven businesses, like Alphabet, could struggle. Historically, advertisers are quick to reduce their spending at the first sign of economic weakness.

But the counter to this argument is that the U.S. economy spends a disproportionate amount of time expanding. Of the dozen U.S. recessions following World War II, only three have lasted at least 12 months. By comparison, almost every expansion has endured for multiple years, with one continuing for a decade. The advertising industry grows in lockstep with the U.S. economy over time.

However, Alphabet isn’t just any ad-driven business. Google hasn’t held less than a 90% share of worldwide internet search since the first quarter of 2015. Having a veritable monopoly in internet search affords the company exceptional ad-pricing power in most economic climates.

There’s also plenty of excitement for Alphabet beyond its foundational search engine. Google Cloud is the world’s No. 3 cloud infrastructure service provider (by market share), and it’s generated three consecutive quarterly operating profits following years of losses. Despite analysts being collectively disappointed by Google Cloud’s 22.5% year-over-year sales growth in the September-ended quarter, it’s important to recognize that enterprise cloud spending is still in its relatively early stages. This is a high-margin segment that’s only going to get stronger from a cash flow perspective over time.

Don’t forget about YouTube, either. In a span of roughly two years, daily views of YouTube Shorts (short-form videos often less than 60 seconds in length) catapulted from about 6.5 billion to north of 50 billion. These bite-sized videos are turning into a serious ad-growth opportunity for YouTube and parent Alphabet.

Lastly, Alphabet remains inexpensive, given its sustained moat in internet search and its rapidly growing operating cash flow. Shares are currently valued at roughly 19 times forward-year earnings and below 14 times consensus cash flow in 2024. For context, Alphabet has averaged a forward price-to-earnings (P/E) ratio of 25 over the past five years, along with a cash flow multiple of 18.

Suffice it to say, a $200 price target isn’t out of the question at some point within the next year or three.

An Amazon delivery driver leaning out of their vehicle to interact with a fellow employee.

Image source: Amazon.

Amazon: Implied upside of 79%

However, the FAANG stock that offers the most blistering upside, based on the price target of one Wall Street analyst, is e-commerce kingpin Amazon. In August, analyst Alex Haissl of Redburn Partners maintained his firm’s buy rating on Amazon but upped his price target from $220 to $230. If Amazon were to reach this lofty price target, its shares would increase 79% from where they closed on Oct. 24.

Similar to Alphabet, the biggest knock against Amazon will be the health of the U.S. economy. People are most familiar with Amazon for its leading online marketplace. If a recession were to take shape, the expectation would be for online retail sales to decline.

The thing is, Amazon’s top segment for revenue isn’t all that important for cash-flow generation. While e-commerce tends to be the lure that attracts a lot of consumers in the first place, it’s the company’s ancillary operations that drive virtually all of its cash flow and operating income. In short, a weaker retail spending environment may not be a big deal for Amazon.

If Amazon stock were to make a run at Haissl’s high-water price target, it would almost certainly be because of strength from AWS. As of the June-ended quarter, tech analysis firm Canalys estimated that AWS accounted for 30% of global cloud infrastructure service spending. Even though AWS generates just a sixth of Amazon’s net sales, it regularly contributes 50% to 100% of the company’s operating income.

Subscription services is another key high-margin segment for Amazon. The lure of its online marketplace, growing content library, and exclusive rights to Thursday Night Football helped push its global Prime subscriber count past 200 million in April 2021. As one of these 200 million-plus subscribers, I can somewhat confidently say that Amazon has exceptional pricing power with Prime.

Advertising services is the third and final ancillary segment that’s of importance. Amazon is one of the most-visited sites in the world, which means it offers prime “real estate” to advertisers. Excluding currency movements, Amazon has delivered eight consecutive quarters of at least 21% year-over-year sales growth from its advertising segment.

Although Amazon isn’t cheap by a traditional measuring stick (i.e., using the P/E ratio), it’s historically inexpensive when analyzed relative to its future cash flow. The latter is a far better measure for Amazon than the traditional P/E ratio, given that Amazon reinvests most of its cash flow back into its faster-growing operations. Whereas Amazon was consistently valued at 23 to 37 times its year-end cash flow throughout the 2010s, it can be purchased by opportunistic investors right now for less than 12 times Wall Street’s consensus cash-flow estimate for 2024.

Similar to Sandler’s price target on Alphabet stock, I believe Haissl’s share price forecast for Amazon can come to fruition within the next few years.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Sean Williams has positions in Alphabet, Amazon.com, and Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Apple, Meta Platforms, and Netflix. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.

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Social media blocks are “a suppression of an essential avenue for transparency”

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In this photo illustration the word censored is seen displayed on a smartphone with the logos of social networks Facebook, WhatsApp and YouTube in the background.

Once praised as the defining feature of the internet, the ability to connect with physically distant people is something that governments have recently been seemingly intent on restricting. Authorities have been increasingly pulling the plug, putting over 4 billion people in the shadows in the first half of 2023 alone

Social media platforms are often the first means of communication to be restricted. Surfshark, one of the most popular VPN services, counted at least 50 countries guilty of having curbed these websites and apps during periods of political turmoil such as protests, elections, or military activity.

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Former Myanmar colonel who once served as information minister gets 10-year prison term for sedition

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Former Myanmar colonel who once served as information minister gets 10-year prison term for sedition

BANGKOK (AP) — A former high-profile Myanmar army officer who had served as information minister and presidential spokesperson in a previous military-backed government has been convicted of sedition and incitement, a legal official said Thursday. He was sentenced to 10 years in prison.

Ye Htut, a 64-year old retired lieutenant colonel, is the latest in a series of people arrested and jailed for writing Facebook posts that allegedly spreading false or inflammatory news. Once infrequently prosecuted, there has been a deluge of such legal actions since the army seized power from the elected government of Aung San Suu Kyi in February 2021.

He was arrested in late October after a military officer from the Yangon Regional Military Command reportedly filed a change against him, around the time when some senior military officers were purged on other charges, including corruption. He was convicted on Wednesday, according to the official familiar with the legal proceedings who insisted on anonymity for fear of being punished by the authorities.

Ye Htut had been the spokesperson from 2013 to 2016 for President Thein Sein in a military-backed government and also information minister from 2014 to 2016.

After leaving the government in 2016, Ye Htut took on the role of a political commentator and wrote books and posted articles on Facebook. For a time, he was a visiting senior research fellow at the ISEAS-Yusof Ishak Institute, a center for Southeast Asia studies in Singapore.

After the army’s 2021 takeover, he often posted short personal vignettes and travel essays on Facebook in which he made allusions that were generally recognized to be critical of Myanmar’s current military rulers.

The army’s takeover triggered mass public protests that the military and police responded to with lethal force, triggering armed resistance and violence that has escalated into a civil war.

The official familiar with the court proceedings against Ye Htut told The Associated Press that he was sentenced by a court in Yangon’s Insein prison to seven years for sedition and three years for incitement. Ye Htut was accused on the basis of his posts on his Facebook account, and did not hire a lawyer to represent him at his trial, the official said.

The sedition charge makes disrupting or hindering the work of defense services personnel or government employees punishable by up to seven years in prison. The incitement charge makes it a crime to publish or circulate comments that cause fear, spread false news, agitate directly or indirectly for criminal offences against a government employee — an offense punishable by up to three years in prison.

However, a statement from the Ministry of Legal Affairs said he had been charged under a different sedition statute. There was no explanation for the discrepancy.

According to detailed lists compiled by the Assistance Association for Political Prisoners, a watchdog group based in Thailand, 4,204 civilians have died in Myanmar in the military government’s crackdown on opponents and at least 25,474 people have been arrested.



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Top CIA agent shared pro-Palestinian to Facebook after Hamas attack: report

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Top CIA agent shared pro-Palestinian to Facebook after Hamas attack: report

A high-ranking CIA official boldly shared multiple pro-Palestinian images on her Facebook page just two weeks after Hamas launched its bloody surprise attack on Israel — while President Biden was touring the Jewish state to pledge the US’s allegiance to the nation.

The CIA’s associate deputy director for analysis changed her cover photo on Oct. 21 to a shot of a man wearing a Palestinian flag around his neck and waving a larger flag, the Financial Times reported.

The image — taken in 2015 during a surge in the long-stemming conflict — has been used in various news stories and pieces criticizing Israel’s role in the violence.

The CIA agent also shared a selfie with a superimposed “Free Palestine” sticker, similar to those being plastered on businesses and public spaces across the nation by protesters calling for a cease-fire.

The Financial Times did not name the official after the intelligence agency expressed concern for her safety.

“The officer is a career analyst with extensive background in all aspects of the Middle East and this post [of the Palestinian flag] was not intended to express a position on the conflict,” a person familiar with the situation told the outlet.

The individual added that the sticker image was initially posted years before the most recent crisis between the two nations and emphasized that the CIA official’s Facebook account was also peppered with posts taking a stand against antisemitism.

The image the top-ranking CIA official shared on Facebook.

The latest post of the man waving the flag, however, was shared as Biden shook hands with Israeli leaders on their own soil in a show of support for the Jewish state in its conflict with the terrorist group.

Biden has staunchly voiced support for the US ally since the Oct. 7 surprise attack that killed more than 1,300 people, making the CIA agent’s posts in dissent an unusual move.

A protester walks near burning tires in the occupied West Bank on Nov. 27, 2023, ahead of an expected release of Palestinian prisoners in exchange for Israeli hostages. AFP via Getty Images

In her role, the associate deputy director is one of three people, including the deputy CIA director, responsible for approving all analyses disseminated inside the agency.

She had also previously overseen the production of the President’s Daily Brief, the highly classified compilation of intelligence that is presented to the president most days, the Financial Times said.

“CIA officers are committed to analytic objectivity, which is at the core of what we do as an agency. CIA officers may have personal views, but this does not lessen their — or CIA’s — commitment to unbiased analysis,” the CIA said in a statement to the outlet.

The top CIA official has since deleted the pro-Palestinian images from her social media page. Hamas Press Service/UPI/Shutterstock

Follow along with The Post’s live blog for the latest on Hamas’ attack on Israel


Neither the Office of the Director of National Intelligence nor the White House responded to The Post’s request for comment.

All of the official’s pro-Palestinian images and other, unrelated posts have since been deleted, the outlet reported.

Palestinian children sit by the fire next to the rubble of a house hit in an Israeli strike. REUTERS

The report comes as CIA Director William Burns arrived in Qatar, where he was due to meet with his Israeli and Egyptian counterparts and the Gulf state’s prime minister to discuss the possibility of extending the pause in fighting between Israeli forces and Hamas terrorists in the Gaza Strip for a second time.

Israel and Hamas agreed Monday to an additional two-day pause in fighting, meaning combat would likely resume Thursday morning Israel time if no additional halt is brokered.

Both sides agreed to release a portion of its hostages under the arrangement.

More than 14,000 Palestinians in Gaza, including many women and children, have been killed in the conflict, according to data from the Hamas-controlled Ministry of Health.



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