As the bull market has progressed, a narrow band of technology stocks has transpired. The investment universe has not seen so much capital concentrated in a single sector that, through ETFs, can be sold at the click of a mouse.
Meanwhile, the emerging perception of increased regulatory risk for FAANG (Facebook, Apple, Amazon, Netflix and Google) stocks has not only capped prices, it has served as an important reminder that excess profitability cannot be extended indefinitely and come up against an opposite force. That may be competition, but it may also take the form of societal rejection or regulatory backlash.
Listed among the 10 most valuable companies in the world, Google dominates search with a 90% share, Facebook commands 88% of social media traffic in the US and by some accounts, nearly half of Americans obtain their news from Facebook. By 2016, the share of online US consumers bypassing search engines in preference for Amazon was 55%, and the biggest Chinese tech companies including Tencent, and Alibaba command similar or even larger shares.