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Stephen Gandel

Tech Stocks Morph Into a Three-Headed Monster

Their influence cannot be contained to just one sector.

The FAANGs break out.

The FAANGs break out.

Photographer: Jason Alden/Bloomberg

What’s an investor to do when a tech stock is no longer a tech stock?

Bank of America Merrill Lynch’s U.S. stock market strategists said recently that investors should overweight technology shares. The catch is the group of tech stocks Bank of America recommended didn’t include Facebook Inc., Netflix Inc. or Google parent Alphabet Inc., three of the closely watched FANG stocks — the other in that group is Apple Inc. — that are usually associated with the tech sector. In fact, Bank of America said those stocks should be avoided. Even more confusing: Neither of those investment calls included Amazon.com Inc., which, along with the stocks of its sector — consumer discretionary — is a buy, according to Bank of America.