FAANG is an acronym used in finance to refer to five of the most influential American technology companies: Meta (formerly Facebook), Amazon, Apple, Netflix, and Alphabet (formerly Google). The term was coined by Jim Cramer, a well-known television personality, in 2013 to highlight these companies' dominance in their respective markets. Initially, the acronym was "FANG," but Apple was later added in 2017.
Key takeaways
- FAANG is an acronym for five of the most influential American technology companies: Meta (formerly Facebook), Amazon, Apple, Netflix, and Alphabet (formerly Google).
- These tech giants are well-known for their innovation and strong financial performance.
- While their dominance has led to significant growth and market value, some investors debate whether their valuations are justified or if a bubble is forming.
- The term "FAANG" was popularized by Jim Cramer and has become synonymous with the most powerful tech stocks.
List of FAANG stocks
Now that you know what FAANG is, let us delve a little deeper into each of the companies on the list to try and understand them better.
1. Facebook
Facebook, one of the largest social media platforms in the world, was founded in 2004 by Mark Zuckerberg. The company went public in 2012 with its initial public offering, where it raised nearly $16 billion.
In addition to Facebook, the company also owns two other major platforms — Instagram and WhatsApp. In 2021, Facebook was renamed Meta Platforms to better reflect its growing aspirations to become a multi-platform service provider and leader in artificial intelligence (AI), virtual reality (VR) and augmented reality (AR).
2. Amazon
Amazon was officially established in 1994 by Jeff Bezos. The company is currently the largest e-commerce platform in the world. In addition to e-commerce, Amazon’s business also includes cloud computing, artificial intelligence (AI), online advertising and digital streaming. The company also has several key subsidiaries like Ring, Twitch, IMDb and Whole Foods Market, which contribute to its revenue.
3. Apple
One of the oldest technology companies in the world, Apple was founded in 1976 by Steve Jobs and Steve Wozniak. In its early years, the company competed directly with Microsoft and focused primarily on manufacturing personal computing systems. However, the breakthrough for the company came in 2007 with the release of the iPhone.
Currently, the company’s product portfolio includes a mix of mobile and personal computing devices. Apple has also recently ventured into the augmented reality (AR) sector and is even making a space for itself in the digital streaming space.
4. Netflix
Netflix was first established in 1997 as a mail-order DVD-renting business. However, the company quickly pivoted to the digital entertainment space with the launch of the Netflix streaming service.
Currently, Netflix is one of the most popular over-the-top (OTT) platforms in the world. In addition to hosting third-party content, the company also produces movies, TV shows and documentaries under the Netflix Originals banner.
5. Google
Google was founded in 1998 as a search engine service and quickly became the most preferred search engine in the world. Today, the company’s other businesses include computer software production, cloud computing, advertising services, quantum computing, consumer electronics and even artificial intelligence (AI).
In 2015, the company went through a major reorganisation where Google became a wholly-owned subsidiary of a new parent company — Alphabet. The reorganisation was fueled primarily by Google’s expansion beyond its original search engine service.
What makes FAANG stocks so popular?
The FAANG stocks - Meta, Amazon, Apple, Netflix, and Alphabet - are not only household names but also some of the world's largest companies. Renowned for their innovation and strong financial performance, these tech giants have consistently delivered impressive returns to investors. Their dominant positions in their respective industries and track record of growth make them attractive investment options.