The FANG stocks—Facebook, Amazon, Netflix and Google—are dominating the market right now. It's not just because of their incredible growth—although they've been doing well in that department. The FANG stocks are also making headlines because they're changing how we think about tech investing.
FANG stocks are a group of companies that are expected to perform well in the future. The acronym FANG is an acronym for Facebook, Amazon, Netflix, and Google. The companies in this group have all seen their stock prices rise exponentially over the past few years. Now FANG has been replaced by FAANG with Apple stock being added to it.
The performance of these stocks has been impressive. Facebook's stock price increased by more than 1,000% since its IPO in 2012. Amazon has also seen great success as its stock price has risen more than 400% since its IPO in 1997 (when Amazon was just a book retailer). Netflix has also seen amazing growth with its stock price increasing by more than 5,000% since its IPO in 2011 (which was less than two years after it was founded). Lastly, Google's stock price increased by over 500% since its IPO in 2004 (though it had already been around for 20 years at that point).
The term "FAANG" was coined in 2016 by hedge fund manager Michael Novogratz to describe four companies that had been growing at an exponential pace: Facebook (FB), Amazon (AMZN), Netflix (NFLX) and Google parent company Alphabet (GOOG).
The term was intended as a joke but quickly became reality as investors flocked to these high-growth companies like never before. By 2018, all four stocks had eclipsed $1 trillion in market cap and were worth more than $100 billion each. In 2019, Facebook hit an all-time high of $374 per share before falling back slightly to $349 per share as investors worried about slowing user growth and slowing ad revenue growth at Instagram. The stock has since recovered somewhat to reach around $301 per share today, up nearly 50% from this year's low point of $200 per share just a few months ago."
Why we suggest one needs to be dynamic in approach. The Uptrend is not a continuous reality and gravity will take its own path. Come Nov 2022 and have a look at below data and chart.
Four of the five frontline U.S.-based tech stocks, popularly known as FAANG, have seen a significant fall in share price over the past year. While Meta—previously called Facebook—and Netflix have seen a decline of over 50%, Amazon Inc. and Google—now known as Alphabet—have dropped 44.3% and 35.5%, respectively.
Apple, the exception, has witnessed peaks and troughs over the past 12 months and is largely unchanged.
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