In everyday life and the stock market, it’s easy to notice the five tech companies that make up the acronym FAANG. FAANG stands for Facebook, Amazon, Apple, Netflix, and Google. These five tech giants are important to watch and be aware of because they are the top companies in the technology sector and comprise a high percentage of indexes, like the S&P 500. In fact, FAANG stocks currently makes up 15% of the S&P 500.
Facebook, ticker symbol FB, owns Instagram, WhatsApp, Messenger, Oculus, and obviously, Facebook. Instagram has over 500 million daily active users, while Facebook has 1.79 billion daily users. Primarily, FB makes their money through providing ads on the media feeds of their users. Since 2015, Facebook’s price has more than doubled and has been a very lucrative investment.
Amazon is insanely difficult to miss, whether seeing brown smiley faces on your neighbors' doorstep or walking into your local Whole Foods. Contrary to popular belief, Amazon’s primary source of profit is through its cloud computing service. Amazon has many revenue sources, a diversified stream of income, and cutting-edge inventions, which has skyrocketed the company over the past 5 years.
You might be reading this article on an Apple phone or computer. Apple, the world’s leading smartphone manufacturer, has made the majority of their profit from their devices' sales. Apple is expanding its business model to include news, gaming, cloud storage and computing, and streaming music and video. Currently, Apple has undergone a 4 to 1 split and is priced at $120.96.
The streaming giant, Netflix, has made its profit from paid subscriptions to its service. With the rise of at-home, digital entertainment, Netflix has accumulated over 180 million subscribers.
Google is the world’s leading search engine and has many different investments in different market sectors. Google owns YouTube, manufactures phones, and has made investments in many various fields, like self-driving cars and smart cities. Google has a top balance sheet and has had an outstanding performance over the past decade.
FAANG stocks are significant in the stock market's overall performance and heavily affect everyday life through their revolutionary products. When buying a FAANG stock, your view should be as a long-term investor. FAANG stocks have outperformed the stock market over the past decade, with all companies at least doubling the return of the stock market since March 2009. FAANG stocks have high revenues and can provide a diverse investment, through the companies' smaller purchases, like Amazon owning Whole Foods. In the FAANG stocks, investors have received great rates of returns at a reasonable amount of risk. FAANG stocks are a universal purchase, having the success of more risky stocks, but having the security of being a Blue Chip Stock.