«With Facebook now Meta and Google now Alphabet, that means our new acronym is MAANAM. Yet, not quite as sexy, but the returns sure could be.» For less-established investors, Centeno is “a big believer in broad-based investment.” She says total stock market index funds or S&P 500 index funds are good places to start. The top five S&P 500 GICS tech stocks by market cap in 2022 are Apple, Microsoft, Nvidia (NVDA), Oracle (ORCL) and Broadcom (AVGO). Unfortunately, since then Meta’s revenue growth has stalled, including a 4.4% decline in revenue in the third quarter of 2022.
In the meantime, Alphabet’s core advertising business is on the mend. In the most recent quarter, revenue was up 7% to $74.6 billion. Following its 2021 name change – a result of Zuckerberg shifting the company’s strategic focus to the Metaverse – the stock shed roughly 70% of its value. Realizing he needed to make a major change, Zuckerberg refocused the company on cutting costs and bolstering its social media properties as well as its AI capabilities. Meta even launched a rival to Twitter – or X – which is called Threads.
With such a small index, investors may be better off building their own portfolio of FAANG or MAMAA stocks and avoiding the ETN expenses. That’s especially true now that most discount brokers south african rand price action setups charge no commissions and allow fractional share purchases. The other bets segment includes Alphabet’s moonshots, such as automated-vehicle business Waymo and health researcher Verily.
That figure shows how influential FAANG stocks are on the market, as these are just five of the 500 stocks in the broad-market index, but their weight on the index is roughly 25 times that. Your best bet among exchange-traded investments is the MicroSectors FANG+ ETN, which counts FAANG stocks as about half its total portfolio. Since there are only five stocks in the FAANG, it wouldn’t be difficult to buy and hold all of them if you are looking for direct exposure. Building your own portfolio allows you to optimize stock purchases and sales for your own unique capital gains tax situation. Considering they’re a major component of the S&P 500, FAANG or MAMAA stocks probably already play at least a small role in your portfolio. But if you want additional exposure to these excellent companies, you can buy the FANG+ ETN or simply dedicate a portion of your portfolio to the stocks themselves.
- Since Cramer’s original FANG list in 2013, Netflix has expanded its business internationally and invested heavily in original content.
- Our estimates are based on past market performance, and past performance is not a guarantee of future performance.
- In 2022, Alphabet holds a dominant share of the online advertising market, but the growth segments that attracted investors for so many years have started to slow.
- Big tech has changed a lot during the 2010s and 2020s, and the acronym for the biggest tech stocks has changed, too.
In August 2018, for example, FAANG stocks were responsible for nearly 40% of the index’s gain from the lows reached in February 2018. No fund or exchange-traded fund (ETF) exclusively contains FAANG or MAMAA stocks. However, the NYSE FANG+ index tracks the five FAANG stocks and five other tech and tech-enabled leaders, including Microsoft. Apple is one of the few companies that makes both the hardware and the software for its devices — and it is certainly the only one at its scale.
Should You Invest in Big Tech?
Cramer believed that these companies belonged together because they are all high-growth stocks that share the common threads of digitization and the web. Apple’s market cap has grown to $2.4 trillion, but analysts still see more growth ahead. The average price target among the 37 analysts covering AAPL stock is $180, suggesting 17.9% upside.
YouTube ad revenue, which was up 43% a year ago, was down 3% in the quarter. Fortunately, Google Cloud revenue is still growing at an impressive 38% year-over-year clip. Apple’s main strength is its ubiquitous iPhone which makes up the major portion of its sales. Apple made about $366 billion in total revenue in the financial year that ended on Sept. 30, 2021, with iPhones making up about 33% of the total sales.
What is the best ETF for FAANG?
In addition to being widely known among consumers, the five FAANG stocks are among the largest companies in the world, with a combined market capitalization of around $7 trillion as of Q1 2022. The company now also focuses on higher-margin subscription services, including music and video streaming, gaming, news, and cloud storage. The upcoming launch of its new spatial computing headset, Vision Pro, could set off the transition to the next major computing platform.
Meta Platforms
Chips are the building blocks of the technology we use every day.
Alternatives to FAANG stocks
While FAANG stocks have proven to be a good bet for investors, there are other mega-cap stocks that deserve to be a part of the coveted list. Since its founding in the late 1990s, Alphabet has mostly made the right bets, whether that was on Android or YouTube. But during the past year, the company has been caught flat-footed. The explosive growth of OpenAI’s ChatGPT – which is backed by rival Microsoft (MSFT) – has shown that Alphabet blundered with generative AI.
FAANG stocks have historically outperformed the S&P 500 index. Alphabet has been the worst performer of the bunch since June 2013, but https://www.day-trading.info/origin-ecn-vertical-blue-2018/ it’s still more than doubled the performance of the S&P 500. The strongest performer in that time has been Apple, up roughly 15-fold.
Morningstar has a “buy” rating and $320 fair value for Microsoft shares, and other Wall Street analysts agree that long-term investors should be buying the 2022 dip. The 40 analysts that cover Microsoft have an average price target of $290, suggesting 25.2% upside potential. However, the later inclusion of Apple — primarily a consumer hardware manufacturer — made FAANG a broader group of technology stocks. The inclusion of Microsoft in MAMAA cements the mega-cap tech focus instead of the internet focus of the original group. Over the past decade, the FAANG stocks and Microsoft shares have grown faster than the overall S&P 500 or the more technology-focused Nasdaq.
Meta is the largest social media company in the world, operating four of the five most widely used social media platforms, including Facebook, Instagram, WhatsApp and Messenger. For investors, it’s almost impossible to ignore https://www.forexbox.info/strategies-for-trading-fibonacci-retracements/ FAANG stocks that have been ruling the market for over a decade. The group of five mega technology companies make up more than 20% of the S&P 500 weighting, the greatest dominance of any sector in more than four decades.
