What are FAANG stocks?

Every class has a smart kid who is good at curricular, co-curricular, extracurricular activities, loved by teachers, and also every student in the school. The stock market version of that kid is FAANG stocks.

FAANG is an acronym of a group of stocks - Facebook, Amazon, Apple, Netflix and Google. They are 5 leading technology companies of the American Stock Market who have given consistent returns for decades, as they are continuously growing and expanding their business.

Originally the acronym was just FANG, as the later A, for Apple was added in the year 2017. Though Google is now Alphabet and Facebook is now Meta, the acronym is still considered as FAANG companies. The stock symbols of FAANG companies are FB for Facebook, AMZN for Amazon, AAPL for Apple, NFLX for Netflix and GOOG for Google.

The FAANG stocks had a combined market capitalization of more than 7 trillion dollars in late 2021. They are also a few of the biggest companies in the world, known for constant innovation, business expansion and growth. All the FAANG companies are publicly traded on NASDAQ and are also a part of the S&P 500 index.

There is a constant debate in the market for the valuation of FAANG stocks, as few investors believe that the stocks might be overvalued, as investors strongly believe that all the businesses are fundamentally strong and can endure in the market for a long time.

List of FAANG stocks

The group of stocks Facebook, Amazon, Apple, Netflix and Google, known as FAANG, also sometimes add Microsoft in it, making it an acronym FANMAG. The FAANG companies constituted 19% S&P 500, considered as a proxy for the overall economy of the US.

The weightage of FAANG companies in NASDAQ 100 is 1/3rd of the entire index, summing it up to almost 33%. As of November 27, 2021, each of the FAANG companies had the following weights in the index:

Facebook (Now Meta) - 3.43%

Amazon - 7.66%

Apple - 11.31%

Netflix - 1.87%

Google (Now Alphabet) - 7.69%

The Google stock is divided into two sock classes, the first is GOOG and the second has the stock symbol GOOGL.

Example of FAANG stocks

FAANG stocks were the giant stocks in the US stock market which were providing constant gains to the investors formerly. In the year 2018, FAANG stocks lost above trillion dollars as their price started declining. However, the stocks have seen a recovery yet they are found volatile in the short-term.

FAANG stocks are believed to be fundamentally very strong. Facebook (Now meta) which is the biggest social network worldwide has more than 2.91 billion monthly active users. At the end of September 2021, Meta Inc had a revenue of 2.9 trillion dollars. It has recorded a net income of 919.4 crore dollars. The market capitalization of Meta Inc is 92.67 trillion dollars.

Amazon, one of the giant e-commerce companies, has more than 200 million amazon prime users. Amazon has recorded 11.08 trillion dollars of revenue and 315.6 billion of net income at the end of September 2021. The market capitalization of Amazon is 1.78 trillion dollars.

The most popular search engine Google has more than 4 billion users. Google class A, which is Alphabet Inc Class A, has recorded revenue and net income of 6.51 trillion dollars and 1.89 trillion dollars respectively. The market capitalization of Google class A is 1.89 trillion dollars.

Over the last five years, Amazon share price increased by 373.37%. Apple share price increased by 470.63% from the past 5 years. Netflix share price increased by 450.98% within the past 5 years.