What is ‘FAANG Stocks’
FAANG is an acronym for the five most popular and best performing tech stocks in the market, namely Facebook, Apple, Amazon, Netflix, and Alphabet’s Google.
Explaining ‘FAANG Stocks’
Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX), and Alphabet (GOOG) are the five technology giants trading publicly in the market today, as of 2017. Wall Street grouped these companies into one acronym to capture the collective impact that these companies have on the markets. As of June 9, 2017, the market capitalization of these companies summed up to $438.07B + $467.70B + $774.86B + $68.22B + $665.87B = $2.415 trillion, which is about the size of the entire economy of France and 13% of the size of the US economy.
Is there a FAANG Bubble?
The valuation and spectacular performance of the FAANGs have been likened to that of the tech stocks before the 2000 dotcom burst, which saw a lot of overvalued tech companies crash, sending the global markets to a downward spiral. However, some analysts have noted that there is a difference between both tech classes, stating that there is plenty room for the current tech class to grow as areas of cloud computing, social media, e-commerce, Artificial Intelligence (AI), machine learning, and big data are still being explored and developed.
Further Reading
- Day ahead forecasting of FAANG stocks using ARIMA, LSTM networks and wavelets. – doras.dcu.ie [PDF]
- How earnings announcement impact Faang stock prices? – repositorio.iscte-iul.pt [PDF]
- Cryptocurrencies as an asset class – link.springer.com [PDF]
- Disruptive Innovations, Fundamental Strength and Stock Winners: Implications for Stock Index Revisions – journals.sagepub.com [PDF]
