The hottest trade of the bull market burned investors when it was time to actually show results.
Investors holding the so-called FANG stocks are taking a pummeling as the tech companies report second-quarter earnings. Google's parent, Alphabet, was the only stock to rise the day of its most recent report, while Netflix dropped more than 5 percent and Facebook took a 19 percent beating on Thursday. Amazon is set to report Thursday after the bell.
Facebook's plunge comes after company executives spooked investors with warnings about decelerating revenue and ongoing privacy policy changes.
"Facebook's terrible results and guidance was the second of the Q2 FANG misses," said Fred Hickey, editor of The High Tech Strategist. "Amazon needs to come through for the tech bulls tonight or there may be an all-out stampede from the overly crowded and overpriced tech sector."
Netflix was rocked by a big miss in subscriber growth, while Alphabet popped after allaying investors fears about Europe's new privacy rules immediately impacting the company's revenue.
Investors around the world have poured into the FANG stocks, along with Apple. The five stocks together have been the most crowded trade for the past six months, according to a Bank of America Merrill Lynch survey of institutional investors in July. The FANG stocks this month beat out shorts of emerging market equity funds and investors buying oil as the globe's most popular trade.
The simple portfolio was popular coming into second-quarter earnings for good reason. FANG rarely misses Wall Street's profit expectations and the market usually rewards the group as a result, according to data from Bespoke Investment Group.
Amazon is the last bastion of hope for FANG this earnings season but is under pressure to report stellar results: Wall Street expects a huge jump in second-quarter profit, just as the company's market capitalization nears making it the world's first $1 trillion company.