FAANG is an acronym for five of the best-performing tech stocks in America. These are: Facebook (now known as Meta), Apple, Amazon, Netflix and Google (Alphabet).
Why are FAANG stocks so well-known?
Unless you've been living under a bat cave, most people have heard of these companies which naturally makes them a popular pick among investors. As of October 2022, they have a market cap of over $5 trillion dollars.
Why isn't Microsoft a FAANG company?
When the term FAANG was coined in 2010, it was used to represent new, public and high-tech companies with lots of room to grow. By 2010, Microsoft had been on the stock market for 24 years and was already well-established.
Who came up with the term FAANG?
The American T.V host Jim Cramer brought the term into the mainstream, but he credits Bob Lang, a colleague of Cramer, for coining the term.
Is FAANG still relevant?
Over the last year, others have coined terms to resemble a more modern acronym. Cramer himself revealed MAMAA, his updated group of stocks (Meta, Apple, Microsoft, Amazon, and Alphabet.) The key changes are:
Microsoft replaced Netflix, as it’s a much more valuable company
The ‘F’ for Facebook changed to ‘M’ for Meta
The ‘G’ for Google changed to ‘A’ for Alphabet
Of course, others have had their say in coining their own terms. Ray Wang, Founder of Constellation Research said goodbye to FAANG and hello to MATANA: Microsoft, Apple, Tesla, Alphabet, Nvidia, and Amazon. MATANA means gift in Hebrew, and Wang found this appropriate given these stocks have shown year-over-year growth in their revenue.
Whilst many investors would be glad to see Tesla in this acronym, perhaps the exclusion of Meta prevents MATANA from being as widely accepted as FAANG/ MAMMA.
So is FAANG still relevant? Well, that depends on if you class this group of stocks solely as technology companies and if you think a company needs a minimum value to be part of the group.
Keen to learn other investing jargon? Check out:
What is a bull market? A guide for beginners
What is a bear market? A guide for beginners
What is compound interest? A guide for beginners
What is dollar-cost averaging? A guide for beginners
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