The stocks referred to by the acronym are all well-known and richly valued technology companies that trade on the Nasdaq exchange, a collection of approximately 4,000 American companies. Many other companies traded on the Nasdaq exchange are also considered growth investments, although very few have matched the impressive growth of the FANG stocks. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories, except where prohibited by law for our mortgage, home equity and other home lending products.

To monetize this extraordinary user base, Facebook sells ads targeted based on users’ personal preferences and usage patterns. Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. To see all exchange delays and terms of use, please see disclaimer. This much excitement and exuberance around a handful of stocks is a major warning sign that a bubble gmarkets is there, and could well burst.

They also often have the resources in place to adapt to new trends, even if they’re not the ones leading the charge. If you follow financial or business news, you may have seen or heard the term FAANG thrown around. It’s an acronym that stands for five big companies — some might say the big companies — in the high-tech industry. Given Apple’s massive revenue base, it is difficult to find ways to boost growth.

Tesla (TSLA) stock forecast 2025 and beyond: third-party Tesla price target

An alternatives to FAANG stocks is the Magnificent 7, a group of tech stocks that includes FAANG stocks except Netflix, while adding Microsoft, Nvidia, and Tesla. Some investors might prefer that avatrade review grouping, while others might go broader, such as with an ETF that tracks many tech companies in addition to FAANG. Other stocks and funds in different sectors could also be worth considering. FAANG actually began as FANG around 2013, as Apple didn’t join the ranks until 2017. The origin of the acronym has often been attributed to Jim Cramer, the financial TV host and co-founder of The Street.com.

Driven by its relationship with OpenAI, the company sees AI as the next major frontier and has invested significantly in new products like the Azure OpenAI and its Copilot AI assistant. Microsoft started out by licensing its Windows operating system to PC manufacturers, but it’s a much broader company 40 years later. Windows licensing sales are now dwarfed by its cloud computing operation, Azure, and its Office productivity suite.

Apple

US lawmakers have drafted a number of bills aimed at limiting the power of big tech companies, aiming to make it harder for them to acquire their competitors. While their stellar financial performances cannot be denied, not everyone is convinced these trillion-dollar-plus valuations are really warranted. Not only that, but the FAANG companies can all channel funds from other businesses towards innovation.

Individual FAANG stock analysis

• This large influence over the index means that volatility in the stock price of the FAANG stocks can have a substantial effect on the performance of the S&P 500 in general.
• We are compensated in exchange for placement of sponsored products and services, or by you clicking on certain links posted on our site.
• The recent launch of its new spatial computing headset, Vision Pro, could help the transition to the next major computing platform, and investors have big hopes for Apple Intelligence, its new AI platform.
• Your best bet among exchange-traded investments is the MicroSectors FANG+ ETN, which counts FAANG stocks as about half its total portfolio.

Alphabet is the parent company of Google (GOOG, GOOGL), but the company is far more than just a search engine. It also has its arms in areas ranging from cloud services to AI to self-driving cars (through the Alphabet subsidiary Waymo). Netflix (NFLX) is one of the most prominent streaming platforms that continues to deepen its library of original content and expand globally. The company is also getting more into areas like live-event streaming and gaming. Keep in mind, however, that past performance is not a guarantee of future results, and you’ll need to analyze if/how these stocks fit into your own portfolio. In the meantime, Alphabet’s core advertising business is on the mend.

Switching costs are too high for a manager to risk his job by selecting another suite of services and training everyone on how to use it. Alphabet has been the worst performer of the bunch since June 2013, but it’s still more than doubled the performance of the S&P 500. The strongest performer in that time has been Meta Platforms, up roughly 22-fold. Exchange traded fund ( ETF ) is a useful instrument in an investor’s arsenal.

The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments. Overall, FAANG stocks are considered relatively stable, safe investments, but there are risks such as around volatility, regulatory changes. There’s also the possibility that they’re overvalued due to too much investor hype.

Their substantial growth has been buoyed by high-profile purchases made by large and influential investors such as Berkshire Hathaway (BRK), Soros Fund Management, and Renaissance Technologies. These are just a few of the many large investors who have added FAANG stocks to their portfolios because of their perceived strength, growth, or momentum. With such a small index, investors may be better off building their own portfolio of FAANG stocks and avoiding the ETN expenses.

• The other bets segment includes Alphabet’s moonshots, such as automated-vehicle business Waymo and health researcher Verily.
• Explore key trends in energy, tech, and international markets in this detailed analysis.
• There are alternative acronyms for clusters of stocks; for example, FAANG incorporates Apple stock.
• In addition to being widely known among consumers, the five FAANG stocks are among the largest companies in the world, with a combined market capitalization of around $9 trillion as of Q2 2024.

All investments can fall as well as rise in value so you could lose some or all of your investment. This includes a draft bill making it unlawful for large platform operators to own businesses that create conflicts of interest. Another bill would prohibit platform operators giving preferential treatment to their own products. Regardless of whether you buy one of those ETFs or the FAANG or FAAMG stocks themselves, the first step is to open a brokerage account so you can easily buy and sell tech stocks online.

Business Insider tells the innovative stories you want to know

Ultimately, this “debate” between investors is best captured by the buying and selling patterns in the FAANG stocks themselves. As a leveraged product, CFDs allow investors to maximise their gains from volatile financial assets such as stocks. However, you should be aware of the high risks involved, as CFD trading also magnifies losses if the share price moves against your position. Born between the late 1990s and early 2010s, Gen Z evidence-based technical analysis has created distinctive slang heavily influenced by social media platforms. Their slang emphasizes efficiency and emotional expression, often with an ironic tone.

Build your skills with a risk-free demo account.

While Jim Cramer is often credited with popularizing the term “FAANG,” he acknowledges that Bob Lang, a colleague at Real Money and The Street, identified these four stocks and coined the acronym. This catchy term has since become synonymous with technological prowess and market dominance. Ultimately, the market decides the fate of FAANG stocks based on the ebb and flow of buying and selling patterns. As these stocks continue to shape the investment landscape, only time will tell whether they maintain their dazzling ascent or face a course correction. You might see these risks as being less likely, or you might simply find the potential rewards to be well worth the risks.

Can I invest in a FAANG stocks index ETF?

This discussion gained momentum in 2018 when several FAANG stocks saw valuations drop by over 20%, pushing them into bear territory. At the time, estimates indicated that FAANG stocks collectively shed over a trillion dollars in market value due to this market correction. It’s worth noting that the FAANG stocks hold considerable sway over the S&P 500 Index, constituting approximately 19% of the index’s value.

Meta even launched a rival to Twitter – or X – which is called Threads. What started as a software project in a Harvard dorm turned into a social media empire. Today Mark Zuckerberg’s Meta counts over 3 billion daily active users across its properties that include Facebook, Messenger, Instagram and WhatsApp. In the latest quarter, the company reported nearly $32 billion in revenue, up 11% on a year-over-year basis, while net income rose 16% to $7.8 billion. The main attraction of buying FAANG stocks is their immense growth potential and their dominance in their respective markets. These characteristics have made these companies cash machines that never stop.

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. Collectively, the FAANG stocks have amassed a staggering market capitalization of around $7 trillion (as of Q1 2022). This immense growth has been fueled by notable investments from influential players like Berkshire Hathaway, Soros Fund Management, and Renaissance Technologies.

All five performed exceptionally well during the pandemic, offering services like streaming and e-commerce that were in high demand while people were stuck at home. These are the movers and shakers of the tech world, with huge market influence, so there are definite advantages to investing. The FAANG stocks grew rapidly during the mid- to late 2010s, becoming increasingly influential over the stock market. Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website.