FAANG Stocks Definition
“FAANG,” is an acronym that refers to a few of the United States’ most prominent tech companies—Facebook, Amazon, Apple, Netflix and Google. For some time now, FAANG stocks continued growth have captured the attention of stock analysts everywhere. In the last year alone, each of the 5 FAANG companies reported revenue earnings in the multi-billions, and in the last 5 years each company has seen their stock rise by at least 100%.
What is the Significance of FAANG?
The five companies that are encompassed within FAANG are the who’s who of tech companies. Perhaps most telling of their stature, is the market value they share and the market capitalization they’ve collectively accumulated. All combined, the FAANGs have accumulated 4.1 trillion dollars worth of market accumulation as of January, 2020. Making FAANG members one of the most popular stocks on the market. Furthermore, since each of the FAANG stocks are traded on the NASDAQ and are included in the S&P 500, and because the S&P is a broad representation of the market, the movement of the market mirrors the index’s movement. Together the FAANGs make up close to 15% of the S&P – a staggering figure since the S&P is generally used as an indicator of the status of the United States economy. So it’s not a stretch to say that FAANG doing well means the US is doing likewise.
Future of FAANG
Unfortunately, the seemingly unstoppable ascension of FAANG stocks may have to come to an end. For a short while at least. With a possible recession looming as a result of Covid-19, experts expect FAANG stocks to take a hit. Which might just mean, for the crafty investor that this is the perfect time to invest. As FAANG stock prices will likely never be lower, and almost assured to rebound once the pandemic ends.
About the Author
True Tamplin, BSc, CEPF®
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.