Wedbush's Dan Ives warns that an anti-trust storm cloud is building in the Beltway that may be more than just talk.
"While fundamentally FAANG stalwarts have navigated these stormy waters better than many had feared, with Amazon in particular a clear beneficiary of this current lockdown, the anti-trust storm clouds appear to be building in the Beltway against Big Tech looking ahead into the rest of 2020," he writes.
"We believe that a broad movement to break up companies solely because they are large will be difficult to prove as we witnessed with Microsoft in the late 1990’s, however with the strong getting stronger (Amazon) during this COVID-19 lockdown, momentum is building in the Beltway on this hot button anti-trust issue," he adds.
While Wedbush stays bullish on the FAANG names, it also believes acquisitions will be a slippery slope as the regulatory scrutiny of any M&A deal (Facebook/Giphy, Google/Fitbit) with a much lower threshold that will likely markedly slow down deal flow in the near term.
