What Are FAANG Stocks?
"What are FAANG stocks" is a question newer investors may ask when they hear the once-popular phrase "FAANG stocks" tossed around.
In 2013, CNBC commentator Jim Cramer coined "FANG" as an acronym for Facebook – now Meta Platforms (META) – Amazon.com (AMZN), Netflix (NFLX) and Google, which is now Alphabet (GOOGL). He wanted to find a quick way to describe these dominant tech and communication services stocks. But by 2017, FANG switched to FAANG when Cramer added Apple (AAPL) to the lineup.
What are FAANG stocks and is it good to invest in them?
While not in as heavy a rotation as it once was, FAANG is a good shorthand to describe mega tech, and investing in these stocks would have juiced your portfolio. Here are the 10-year returns for the five FAANG stocks.
The average return during this period for FAANG stocks is a sizzling 755%. By comparison, the S&P 500's 10-year return is 166%.
"The latest great leap forward has been generative AI [artificial intelligence], and the FAANG stocks are all, to one degree or another, involved in bringing generative AI into existence and attempting to monetize it," says John Cunnison, chief investment officer at Baker Boyer. "The most interesting FAANG stocks are likely going be those with the best strategies for deploying, integrating and, ultimately, monetizing AI."