Tech stocks had an uninspiring first half, after which they collectively lost several billion dollars in market capitalization. Given the sharp declines, investors began pricing in a rebound as fundamentals improved, prompting bargain hunters to step in.

Stem rot of beaten technology stocks: True to expectations, tech stocks rallied after hitting a low in mid-June, a few weeks before the end of the second quarter.

The main contributor to the reversal in sentiment is the expectation that monetary policy tightening may be less aggressive going forward. The US economy went through a second consecutive quarter of contraction – technically called a recession. The data point raised gives hope that the Federal Reserve may not be as aggressive as it was earlier this year.

July consumer price data showed easing inflationary pressures, further bolstering optimism.

The Invesco QQQ Trust QQQ hit a low of $269.28 on June 16 and rose more than 22% from the level at $329.28 on Thursday. The ETF fell 1.95% on Friday amid volatility associated with option expirations and some hawkish talk from the Fed.

See also: Apple ‘Data rebounded quickly,’ analyst says, citing ‘strong start’ for iPhone sales

How did the FAANG behave: In addition to the broader market and technology sectors, the so-called FAANG – Apple Inc. AAPL, Meta Platforms, Inc. META, Amazon, Inc. AMZN, Netflix, Inc. NFLX and Alphabet, Inc. GOOGL GOOG also rebounded.

In addition to macro factors, earnings also played a role in the appreciation of these stocks. Despite supply constraints and uncertainties around the demand side of the equation amid the economic downturn, most big tech companies have reported fairly encouraging results.

A savvy investor, who may have accurately predicted the bottom and taken a position in these stocks at their mid-June lows, may have generated decent returns.

How do FAANG returns compare?

  • A $1,000 investment in Meta at $154.25 (achieved on June 23) would have returned around 6.5 shares; It would have been worth $1,132.32 on Thursday, a return of 13.2%.
  • A $1,000 investment in Apple at $129.04 (achieved June 16) would have returned approximately 7.8 shares; It would have been worth $1,349.58 on Thursday, a 35% return.
  • A $1,000 investment in Amazon at $101.43 (achieved June 14) would have returned approximately 9.9 shares; It would have been worth $1,402.93 on Thursday, a return of 40.3%.
  • A $1,000 investment in Netflix at $164.28 (achieved June 14) would have returned approximately 6.1 shares; It would have been worth $1,492.39 on Thursday, a return of 49.2%.
  • A $1,000 investment in Alphabet at $105.05 (achieved June 17) would have yielded about 9.5 shares; It would have been worth $1,143.93 on Thursday, a return of 14.4%.