The Definition Of FANG
Published on: 08/16/18 11:21 AM
Category: Uncategorised
The acronym regarding the NASDAQ exchange for the technology sector for four large-cap stocks is FANG. This is in reference to Facebook, Amazon, Netflix and Google. This term was coined by Jim Cramer in February of 2013. They were grouped together due to their powerful presence, strong growth and positive outlook. This group is now synonymous with US equities because they are important members of the S&P 500.
The public popularity and large size has led to investors and speculators to view FANG stocks as a tool to gauge risk trends and market sentiment. FANG stocks are also an important barometer for the economic activity in the United States. This includes poor corporate results being perceived as a signal an economic slowdown in imminent. Investors often interpret trade concerns or a decreasing demand for disposable income as a threat to the market.
Apple is the most recent addition to the original four in the FANG acronym which has now become FAANG. Apple was included due to the similarities with the others but may be more significant because it is publicly traded. This gives Apple the ability to influence US equities. FAANG+ extends the basket contained in the technology sector with less reference to the financial media.
The first member of FANG was Facebook or FB. This is the third largest cap in the market and when Q2 2018 began, FB had $561.78 billion from the start. The company has had issues regarding regulatory hurdles and privacy in recent years. Despite this, Facebook maintains a large global reach and is using acquisitions for expansion. Amazon or AMZN is characterized by razor thin margins and expansive growth. By Q2 of 2018, their market cap was $827.80 billion. Amazon is entering new industries and changing the shopping habits of consumers.
Apple or APPL has the biggest market cap in the group. By August 2nd of 2018, they had surpassed $1 trillion. They are one of few businesses capable of influencing the whole market. The software company and mobile manufacturer is based out of Seattle and was not included in the original FANG. Investors include the company due to the growth, size and connection to the tech industry. Netflix or NFLX is the smallest member of the group according to market capitalization. Their revenue comes from media production and subscriber payments. At the start of the second quarter for 2018, their market capitalization was at $170.45 billion.
Google is the leader in artificial intelligence, web services and advertising. Alphabet is their parent company and they are a strong contributor to the growth of the index. The market capitalization for Google at the beginning of Q2 2018 was $785.86 billion.