Here's what would happen to FANG stocks if regulators break them up, according to Bank of America

Published Thu, Feb 13 202010:51 AM EST

Jesse Pound @/in/jesse-pound @jesserpound

Breaking up major tech firms could create winners and losers for investors in the popular stocks, according to Bank of America . The bank's new client note from analyst Justin Post comes after the Federal Trade Commission said on Tuesday that it will review acquisitions made by major tech companies over the past decade. Alphabet , Facebook , Amazon , Apple and Microsoft were all named in the press release. The odds of regulators forcing break-ups are low, Post said, but some of the stocks could see a rise in overall value if it happens. The tech company that could see the biggest gain in value from a break-up is Alphabet, Post said. If Google's parent company were to be split into separate pieces, the new companies could be more aggressive about monetizing platforms without hurting each other's revenue. "While management may argue that search and YouTube ads are sold together, we think each platform has enough scale to capture vast advertiser interest as separate entities," Post said. The outlook is not as positive for Facebook. If the social media giant were to be broken up, its main app would have to compete with its other large services and potentially make them all worse off, Post said. "We think a breakup of Facebook could be most concerning for investors given that separate Instagram and Whatsapp platforms would likely compete directly with Facebook for usage and advertisers, raising concerns on increased competition," Post said. Facebook seemed to take the biggest hit of all the tech stocks following the FTC's announcement, with shares falling 2.8% on Tuesday. The stock is still up about 2% for the year. Forced spin-offs would be mostly neutral for Amazon, Post said, but its cloud business could benefit from being free of the e-commerce arm that makes potential customers wary. "Key positive could be benefit to Amazon Web Services for capturing customers in the retail, media and tech categories given competition fears with Amazon's retail business," Post said. Streaming giant Netflix , which is not included in the FTC's review, remains Bank of America's top FANG idea for 2020, according to the note.

Google CEO Sundar Pichai testifies before the U.S. House of Representatives Judiciary Committee.

Liu Jie | Xinhua News Agency | Getty Images

Breaking up major tech firms could create winners and losers for investors in the popular stocks, according to Bank of America.

The bank's new client note from analyst Justin Post comes after the Federal Trade Commission said on Tuesday that it will review acquisitions made by major tech companies over the past decade. Alphabet, Facebook, Amazon, Apple and Microsoft were all named in the press release.