If you’ve been reading up on financial news off-late, your mind must be buzzing with one fundamental question - ‘what is a FAANG company?’ The acronym ‘FAANG’ is generally used to connote the top five tech companies in the US - Facebook (Meta), Apple, Amazon, Netflix, and Google (Alphabet). Their combined market value exceeds several trillions!
The FAANG companies are all American corporations with a global presence. The term, coined by famed TV host Jim Cramer, describes the hottest and most dominant tech stocks.
The FAANG stocks collectively comprise around 15% of the S&P 500 index, a proxy to gauge movements in the broader US economy. It is indicative of their influential position as industry game-changers. Influencing tech trends, setting innovative benchmarks, and defining consumption trends, FAANG companies don't just impact the US economy but also the global one.
The promising gains made by these stocks and the business growth prospects they offer have driven their popularity among Indian investors. To directly stake out a portion of these blue-chip stocks, you can approach a domestic brokerage firm with foreign ties. For indirect investments, you can go the ETFs or mutual funds way.
Think about your day. From ordering groceries and streaming shows to even looking up the ‘What is a FAANG company?’ question, FAANG company products and services permeate your everyday life.
(Note: Following stats & market cap values represent those from early 2023)
The e-com trailblazer, Amazon, has a worldwide appeal and makes revenue through retail sales and service subscriptions to Prime. With a current market cap of $1.043 Trillion, Amazon shows promise of expansion through its cloud computing AWS (Amazon Web Services) platform.
Manufacturer of the famed iPhone and Macbooks, Apple is a path-breaking innovator. Apart from its highly-profitable premium products business, Apple’s growth is linked to its service verticals (App Store, Apple TV+, and others). It has pushed the company’s current market cap over the $2 Trillion mark.
Growing from a DVD-rental business to now a global entertainment powerhouse, Netflix now commands a market cap of $160.54 Billion. After the pandemic and its quarantine measures, the streaming platform now commands over 230 Million (Q4,2022) paid subscribers globally.
As the top search engine, Google generates its revenues through advertising on YouTube, Google Maps, and other subsidiaries. Other sources include its cloud computing platform and hardware products. As of February 2023, the company's market cap stands at $1.261 Trillion; other subsidiaries like Waymo and CapitalG present promising opportunities to enrich the revenue trail.
Over the years, the dominant market position and exponential growth of FAANG stocks have signalled strength and safety to several Indian investors. However, before you join the FAANG bandwagon you should review their growth potential and the current US market outlay. If you wish to partake in these big tech giants, you can do so easily with Fi Money. With the Fi Money app, you can invest in the FAANG stocks at industry-best Forex rates and without brokerage charges. If you’re a beginner, you can also benefit from Fi’s in-app explainers and Curated Collection when buying these blue-chip stocks.
Known for their strong market performance, FAANG stocks are the most valuable and dominant stocks in the US market. They have consistently outperformed the market, showing growth and momentum. The sheer size of the FAANG stocks means that any movement in price can influence the overall market (over $7 trillion in early 2022). With a combined market cap of trillions and a proven innovative history, FAANG stocks make for promising investment options.
While Microsoft isn’t a part of FAANG, sometimes the acronym gets changed to MAMAA to include the Microsoft stock. With Netflix losing its market cap in mid-2021 and Facebook rebranding itself to Meta, MAMAA now stands for Meta, Apple, Microsoft, Amazon, and Alphabet.