Communications stocks rallied during the week, buoyed at the end by a broader stock market which had its first winning week in nearly two months – but the sector followed the broader technology market, as midweek injury to Internet stocks dragged.
The communications services sector (XLC) SPDR fund was up 3.8% for the period, which would look solid were it not for an S&P 500 which marked its best week since November 2020, gaining around 6.6%.
In a week you’d be hard-pressed to find a large-cap communications stock that fell – only six of those names ended up worse off than a week ago – the clear outlier was Snap (NYSE: SNAP), which fell on Tuesday (and appeared to take the rest of the stock market with it) after Monday night’s warning that deteriorating macro conditions meant it would miss its second-quarter guidance.
The stock dipped 43.1% that day, and even gains of 11%, 5%, and 5% the rest of the week couldn’t mitigate a 33% drop for the whole week.
Snap’s warning weighed on social media peers like Meta Platforms, Alphabet and Twitter, though those stocks rallied; the one that hasn’t been Pinterest (NYSE: PINS), the second-worst large-cap coms decline of the week, down 10.7% over this period.
The winning side was more populated, and the best large-cap performer was Lumen Technologies (NYSE: LUMN), up 13% for the week. Lumen put it together a bit in May; it is up more than 24% for the month, and now well above its 52-week low in February.
Baidu (NASDAQ: BIDU) gained 11.8% for the week, capping gains with strong earnings driven by its non-advertising revenue such as Baidu AI Cloud.
The top five gainers over the past five sessions among large-cap and larger communications services stocks (market cap $10 billion or more):
- Lumen Technologies (LUMN), +13%;
- Baidu (BIDU), +11.8%;
- Liberty Global Class A (LBTYA), +9%;
- Endeavor Group Holdings (EDR), +8.9%;
- Vodafone (VOD), +8.5%.
The top five declines over the past five sessions among large-cap and larger communications services stocks (market cap $10 billion or more):
- Snap (SNAP), -33%;
- Pinterest (PINS), -10.7%;
- WPP (WPP), -2.8%;
- Liberty Braves Group Series A (BATRA), -1.3%;
- News Corp Class B (NWS), -0.2%.