FAANG Stocks: Definition and Companies Involved

Apple is a leader in selling personal electronic devices that include computers, smartphones, smartwatches, and accessories. Apple also makes money through certain subscription fees, such as its iCloud data storage service and Apple Music platforms. Apple has created a culture of loyal Apple followers who will wait in line for hours to get the next iteration of an iPhone or other gadget.

1. FAANG companies’ dominance in major US indices is likely to remain unchallenged for many years to come.
2. Driven by its relationship with OpenAI, the company sees AI as the next major frontier and has invested significantly in new products like the AI-powered Bing.
3. Apple made about $366 billion in total revenue in the financial year that ended on Sept. 30, 2021, with iPhones making up about 33% of the total sales.
4. Big tech stocks have taken a hit in 2022, and each of the MAMAA stocks is down at least 13% year-to-date.

Meta owns two of the world’s largest and most engaging social media apps (Facebook and Instagram) and two of the biggest messaging apps (WhatsApp and Messenger). It makes money by displaying ads to users while they browse photo and video feeds. Meta is investing heavily in virtual reality (VR) technology, led by its Quest headset.

Meta Platforms

Tech stocks have been among the top-performing investments over the past two decades, but the tech rally has hit a wall in 2022. Each of the FAANG stocks trades on the Nasdaq exchange and is included in the S&P 500 Index. Since the S&P 500 is a broad representation of the market, the movement of the market mirrors the index’s movement. As of August 2021, the FAANGs make up about 19% of the S&P 500—a staggering figure considering the S&P 500 is generally viewed as a proxy for the United States economy as a whole.

List of FAANG Stocks

Looking ahead, Wall Street analysts remain overwhelmingly positive about MAMAA stocks. The five stocks currently have an aggregate of 201 “buy” or “outperform” ratings from sell-side analysts, compared to only seven total “sell” or “underperform” ratings. “Stocks that have traded at excessive valuations have to be re-priced, and that is what 2022 has largely been about,” says David Bahnsen, chief investment officer at The Bahnsen Group. Given the influence of tech across industries and the recent string of IPOs, maybe there will be a new acronym in the near future. This website is using a security service to protect itself from online attacks.

Alphabet (GOOGL) (GOOG)

The action you just performed triggered the security solution. There are several actions that could trigger this block including submitting a certain word or phrase, a SQL command or malformed data. Investors seeking to invest in FAANG stocks should understand what the companies do and how they make money. While Jim Cramer certainly popularized the term, he https://www.topforexnews.org/news/top-major-us-imports-and-exports-with-statistics/ himself credits Bob Lang, a Real Money and The Street colleague of Cramer’s, with identifying these four stocks and inventing the acronym. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns.

If you’d like to get a slice of each FAANG stock instead of picking only one or two, then signing up with an ETF brokerage is the way to go. Over the past decade, FAANG stocks have produced returns that are much higher than the benchmark indices, including S&P-500 and the tech-heavy NASDAQ-100. That extraordinary power of FAANG stocks means that you are better off by buying some of the top FAANG names to improve your returns.

Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Our estimates are based on past market performance, and past performance is not a guarantee of future performance. In addition, rising interest rates tend to trigger earnings contractions in the stock market as a whole, compressing valuations.

They also led the stock market’s rebound during the Covid-19 pandemic in 2020. While the FAANG stocks are fairly mature companies, they still seem to have a great capacity for growth. And the fact that they account for roughly 15% of the S&P 500, a bellwether for the entire stock market, means their performance often heralds trends in the US economy as a whole. The FAANG stocks are all easy to acquire, in the sense that they are publicly traded companies with substantial daily trading volumes. They are also routinely included in popular exchange-traded funds (ETFs). However, investors who believe that the FAANG stocks may be overvalued would argue that they are difficult to acquire at an economical price.

Can I invest in a FAANG stocks index ETF?

Alphabet is a tech conglomerate primarily split between Google and its “other bets” segment. Although Google started as an internet search company, it’s continued acquiring and developing consumer-facing products — nine boasting more than 1 billion users each. Google also encompasses a growing cloud computing business and a relatively small hardware business. Facebook benefited immensely during the COVID-19 pandemic as the number of businesses that use social media to reach their customers increased exponentially. To help sustain that momentum, Facebook has been investing in new technologies, such as the metaverse, to fuel future growth. FAANG stocks have done well over the last several years, often beating the standard indexes.

Our partners cannot pay us to guarantee favorable reviews of their products or services. The five MAMAA stocks have a combined market cap of more than $6.6 trillion. As of September 2022, the S&P 500’s total market cap was about $30.1 trillion, meaning these five stocks alone accounted for nearly 22% of the entire index’s weighting. Analysts are optimistic Alphabet’s share price will find its stride once again. The average price target among the 44 analysts covering GOOGL stock is $129, suggesting 36.3% upside. At the time, the company had a roughly $796 billion market cap.

No fund or exchange-traded fund (ETF) exclusively contains FAANG or MAMAA stocks. However, the NYSE FANG+ index tracks the five FAANG stocks and five other tech and tech-enabled leaders, including Microsoft. Apple is one of the few companies that makes both the hardware and the software for its devices — and it is certainly the only one at its scale. It’s hard to find an enterprise operation that doesn’t use Microsoft’s Office suite.

Driven by its relationship with OpenAI, the company sees AI as the next major frontier and has invested significantly in new products like the AI-powered Bing. Apple is one of the biggest smartphone manufacturers in the world. Kiplinger is part of Future plc, an international media group and leading digital publisher. “The more money you have, the more ability you have to make bets on individual companies,” Centeno says. Streaming video platform Netflixis the only original FANG member not included in the MAMAA group.

Investors seek to buy and hold FAANG stocks because of their incredible return rate, especially when put side-by-side with the S&P 500 Index. https://www.day-trading.info/how-moderna-executives-are-cashing-in-on-covid/ Take a look at how each stock performed from March 1, 2009 to July 1, 2021. Chips are the building blocks of the technology we use every day.

Meta Platforms currently ranks just outside of the top 20 largest stocks in the S&P 500 with a market cap of $263 billion. Leon isn’t alone in his belief mariadb development services that Netflix has a difficult journey ahead. The average price target among the 43 analysts covering NFLX stock is $305, suggesting just 4.3% upside.