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Meta’s Meltdown Shows How Big Tech’s Invincible Era Is Over

For years, Facebook, Amazon, Apple, Netflix and Google—the revered FAANG companies—were great investments. But a brutal quarter has revealed that they’re no longer sure things.

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When a big stock dives, as Meta Platforms Inc. did on Oct. 27, dropping almost 25%, investors are often urged to take the long view of its performance. In this case, it hardly helps. If you bought Meta five years ago—back when the company was still known as Facebook—you’d be down about 49%, in a period when the S&P 500 climbed 45%. Meta has not only erased its gains from the pandemic, which turned social media into an essential technology, but also fallen back to where it was in 2015.

Meta isn’t just another stock—it was a constituent of the FAANG group, investors’ shorthand for a set of seemingly invincible technology companies. Along with the former Facebook, there were, Apple, Netflix and Google parent Alphabet. Despite their high valuations, many investors regarded these stocks as safe investments, because together they captured where so much of the economy’s growth seemed to be—from retailing to entertainment to smartphones—while also commanding strong balance sheets and huge scale to fend off rivals. Today, even though the five stocks still make up over 13% of the market value of the S&P 500, the FAANG narrative seems like it’s over for good.