What are FAANG stocks? If you’ve paid attention to the stock market over the last decade, you’ve undoubtedly seen the acronym FAANG mentioned regularly. But have you ever wondered what it means? It was originally FANG and was coined by CNBC Mad Money host Jim Cramer.
He wanted to give a nickname to the four dominant tech stocks that were exhibiting record-breaking growth. As a result, it changed the way companies were being analyzed. In 2017, the fifth stock was added to the group. You may be surprised at which one was originally left out, especially given its current status as the most valuable company in the world.
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List of FAANG Stocks and Companies
You can buy FAANG stocks and FAANG stocks ETF. They’re probably some of the best stocks because the tech stock sector has been screaming for a while. That could potentially mean a pullback is coming.
But this sector has been hot for a while. And you can make good money off a strong trend.
Why are the FAANG stocks important for investors to know? Well, you’ll quickly see that since 2017, these companies have grown to be some of the largest in the world by market cap.
They also form some of the largest weighted holdings of the benchmark S&P 500 index. So, if you ever invest in a broad market ETF or Mutual Fund, there’s a high likelihood that you have some exposure to these stocks already. So, without further ado, let’s look more in-depth at the FAANG stocks and what they do.
1. F Is For Facebook (NASDAQ: FB)
Facebook is the social media king. There are an estimated 1.85 billion daily active users and a staggering 2.8 billion monthly active users. No other social media platform comes close to Facebook’s reach. And yet, you’ve probably noticed that real-world sentiment towards Facebook has soured over the years.
That’s because of the ongoing controversy over what Facebook does with our data, highlighted in the documentary The Social Dilemma. The company also owns extremely valuable brands like Instagram, Oculus Rift, and WhatsApp, the most-used messaging app globally, with well over 2 billion global users.
Facebook has a market cap of roughly $870 billion and trades at a share price of just over $300 per share. This FAANG stocks ETF could be great for your portfolio.
2. A Is For Amazon (NASDAQ: AMZN)
Amazon’s inclusion in FAANG stocks should come as no surprise. They’ve grown to become the dominant eCommerce brand in the world. Amazon recently revealed that its Prime membership has over 200 million global subscribers. The scary thing is that Amazon is currently only operating in 19 countries!
But while online shopping put Amazon on the map, the company has been busy building out other branches of its portfolio. AWS, or Amazon Web Services, is one of the world’s most widely used cloud-computing platforms.
And it’s rapidly growing each year. It’s estimated that in 2020, AWS already accounted for 10% of Amazon’s total revenues but a whopping 52% of Amazon’s operating income. Amazon owns plenty of brand power in its portfolio as well. This includes Whole Foods, Audible.com, Twitch, and large investors in electric truck startup Rivian.
3. A Is For Apple (NASDAQ: AAPL)
It’s hard to imagine FAANG stocks without Apple, but Cramer left the company despite soon becoming the most valuable brand in the world. They were the first company to hit a market cap of $1 trillion.
Apple is a dominant force in the tech industry with its premium product line that features iPhones, iPads, MacBook computers, Air Pods, and Apple TV.
No single piece of technology may have changed the world more than the iPhone did upon its original release in 2007. Apple is also getting into the electric car industry. CEO Tim Cook announced he was resurrecting Project Titan, which will see the global tech leader make its first foray into the automotive industry.
4. N Is For Netflix (NASDAQ: NFLX)
Yes, the old DVD mail rental service turned streaming giant was included in FAANG stocks, even though it pales compared to the others in size. But Netflix is one of the best examples of an industry-disrupting company that revolutionized our thoughts on TV.
Netflix made cutting the cable cord cool. And with over 200 million global subscribers across 190 countries, it’s truly establishing itself as a global brand.
Netflix streams other network programs. But much of its success has come from its production, with popular original shows like Stranger Things, Ozark, Bridgerton, and House of Cards. This is another potential FAANG stocks ETF.
5. G Is For Google (NASDAQ: GOOGL)
At the time, Google was still trading under the name Google rather than its parent company, Alphabet, which it switched to in 2015. Google needs no introduction as the largest internet search engine in the world.
Google also has a vast ecosystem of products, including the popular Pixel phones and laptops. But perhaps most significantly, Google Cloud is a chief rival to AWS in the ever-growing cloud computing network.
With an incredible stable of Google apps, including Google AdSense, Gmail, Google Maps, Google Translate, YouTube, and Google Analytics, to name a few, there’s no bigger brand name on the internet today. Oh, and it also developed the Android mobile platform, which is used on an estimated 71% of smartphones worldwide.
FAATMAN and FAANG Stocks
Hey, things always change and evolve. Especially when it comes to the tech sector. So, while FAANG stocks were a thing in 2013, things have surely changed eight years later, right? Well, not exactly. By switching the G in FAANG to another A, all of the original cast members appear in FAATMAN. So, who has since been added to this illustrious list?
Tesla (NASDAQ: TSLA)
The electric vehicle sector was something out of science fiction movies in 2013. But in 2021, you can’t read an investing article without seeing the letters EV plastered all over it. Enter Tesla, the industry leader and automotive industry disruptor that has made loyal investors a boatload of money over the past two years.
Tesla has surged to a $710 billion market cap and is more valuable than General Motors, Ford, Toyota, Volkswagen, Daimler, and Nissan combined. As you know, Tesla has incredible brand power around the world. And they’re expanding heavily into Europe and China and have their sights set on India.
Tesla already has several models in production and recently reported a record sales quarter of 184,800 vehicles delivered globally. With more tailwinds for 2021, including the heavily rumored FSD or fully driving autonomous vehicles, the controversial Cybertruck, and potential long-haul delivery game-changer Tesla Semi, there’s little doubt as to why Tesla has been added to the most exclusive group of stocks there is. This is another potential FAANG stocks ETF.
Why Is Microsoft Not in FAANG Stocks?
Microsoft has transformed itself from an enterprise software company to a multi-faceted tech behemoth under the guidance of CEO Satya Nadella. Their Azure cloud computing program is yet another competitor in the highly sought-after sector, rivaling Google Cloud and AWS.
Microsoft’s gaming has exploded with the latest Xbox Series S and Series X consoles, its ownership of Minecraft, and rumored interest in acquiring Discord. Since 2013, Microsoft has also acquired LinkedIn Skype (which later became the foundation for Microsoft Teams). And its most recent purchase, Nuance. At $1.97 trillion, Microsoft is a shade behind Apple as the second most valuable company in the world. Not to mention Microsoft owns Minecraft stock (yes, really)
Square ($SQ) TipRanks Stock Forecast Report 3/24
What Are the Next FAANG Stocks?
After FAATMAN, which stocks could we see in the next iteration of this group? Here are a few names we have our eyes on that could cut.
1. NVIDIA (NASDAQ: NVDA)
Already a nearly $400 billion company, NVIDIA has emerged as the leader in microchip technology. They have surpassed stalwarts like Intel and AMD. NVIDIA also has its hands in multiple cookie jars, including data centers, autonomous driving, next-gen gaming, and artificial intelligence.
2. Square (NYSE: SQ)
Disrupting the banking sector isn’t easy. But Square is perhaps the fintech company set to change how we think about money. With its Cash App, Square has already digitized payments. With its integration of cryptocurrency stocks via the Square stock trading app, the company continues to be on the cutting edge of digital finance.
3. Tencent (TCEHY)
Could a Chinese company crack the list of top stocks worldwide? Why not? The Chinese internet conglomerates are among the largest companies in the world, led by Tencent, Baidu, AliBaba, JD.Com, and PinDuoDuo, to name a few. Tencent is a sprawling business with a heavy focus on the gaming industry. They own Riot Games, which owns League of Legends, and a 40% stake in Epic Games, which owns Fortnite. Tencent also owns large parts of companies like Sea Limited, PinDuoDuo, EV makers NIO and Xpeng, and a host of other brands around the world. They currently have a market cap approaching USD 800 billion and will likely hit $1 trillion at some point shortly.
Bitcoin
Sometimes, you have to throw a wildcard in there. Bitcoin already has a $1 trillion market cap. And with prices anticipated to top USD 100,000 per coin later this year, Bitcoin is likely to move ahead of gold as the most valuable store of wealth. Companies like Tesla, Square, PayPal, Visa, and Mastercard already holding Bitcoin on their balance sheets and accepting it as payment. As a result, don’t be surprised if Bitcoin has changed the way we think about currency forever.
Final Thoughts: FAANG Stocks
We hope this post has answered the question of what are FAANG stocks and FAANG stocks ETF. These tech giants are some of the best stocks to trade, invest in, and keep on your watch list. The options on these stocks are great because of the high liquidity on large caps. Therefore, you can always make money on these stocks.
