Some of the most important technology stocks listed on the S&P 500 are going through a major shake-up on Monday, September 24. Mega-corporations such as “Alphabet Inc., Facebook Inc., Netflix Inc.,” will be moved from the technology and consumer discretionary sectors and placed into the new comprehensive “communication and media stocks” sector. According to a report from Reuters, this move is the most substantial change to the Global Industry Classification Standard (GICS) in history.
“The last several years have seen an evolution in the way we communicate and access entertainment content and other information,” said a representative of the S&P Dow Jones last year after the shake-up was first announced. “This evolution is a result of integration between telecommunications, media, and internet companies,” he added.
The S&P Dow Jones also stated that the reclassification “is a step toward acknowledging the convergence of telecommunications, media, and select internet companies and the overlapping services rendered by these companies, within the GICS Structure.”
Although several stocks are changing classifications, “Facebook, Netflix, and Google-owner Alphabet,” are the ones many investors are watching the closest. These stocks comprise three of the four companies that form the “FANG stocks,” with the fourth stock being Amazon. These stocks are some of the most dominant in the technology sector, with many experts attributing tech’s meteoric rise in large part to these four corporations.