FANG = Facebook, Amazon, Netflix, and Google
If you’ve watched or listened to any financial media show within the past few months, I’m sure you’ve heard the FANG Stocks term being thrown around. It’s simply an acronym coined by Jim Cramer for 4 of the best-performing technology stocks currently trading on the NASDAQ: Facebook (FB), Amazon (AMZN), Netflix (NFLX), and Google (GOOG). I’ve even seen Apple (AAPL) thrown in there as well, resulting in a slight variation to the term – FAANG. Year-to-Date, Facebook is up 43%, Amazon is up 37%, Apple is up 30%, Netflix is up 52%, and Google is up 26%. All of these high-flying tech stocks have absolutely crushed the overall market in recent years.
While the NASDAQ seeks to measure the performance of over 3,000 different tech and growth stocks that are considered a reflection of the entire economy, the reality is that these five stocks have essentially been driving the entire market as of late. They’re all large-cap names with seemingly lofty valuations at this point, but will their spectacular run ever end? Some think that the performance of FANG stocks are reminiscent of the tech stocks that delivered similar momentum prior to the Dotcom Crash and investors could be in for a hefty correction in the near future. Others, however, believe that this run is sustainable as long as these cutting-edge companies continue making advancements in futuristic areas, such as Artificial Intelligence and Machine Learning. Only time will tell which group of analysts and investors are correct.