The world’s economy is largely dependent and affected by the stock market. The stock market is the focal point of investors across the globe. The investors buy share/stocks of promising companies to make huge profits in the future. However, choosing the right company is key. For this, most investors follow the market trend and go with the flow. If you are also keen on investing in stocks and looking for the most profitable and popular option in 2020, you should vouch on FAANG stocks. It stands for America’s top 5 technology giants including, Facebook, Amazon, Apple, Netflix, and Google. Let’s find out more about them.
What Are FAANG Stocks
FAANG is an acronym that denotes the top five technology giants that are ruling the stock market in the year 2020. These companies are Facebook, Amazon, Apple, Netflix, and Google. The five companies comprise a significant chunk of the S&P 500’s combined market capitalization of approximately $5.1 Trillion.
Looking after the growth of these stocks in the international stock market, top investors worldwide have invested a lump sum amount in them. With these investments, the shares of the concerned companies started touching the skies in terms of profits. Almost every investor is adding these stocks into their portfolios. So, why should you be left behind?
Components of the FAANG Stocks
The five main components of FAANG stocks are.
The very first alphabet in FAANG is ‘F’ that stands for the world-famous app, Facebook. It has billions of users growing every day, connected through Facebook, Messenger, Instagram, WhatsApp, and Oculus. After such immense growth of Facebook over these years, it is considered the social media powerhouse. Facebook has gained huge profits with an increasing number of users and with the increase in downloads of WhatsApp, and Instagram app. It is traded at approximately $245.
Moving ahead, we come to the next alphabet, ‘A,’ which stands from Amazon. Amazon is one of the largest e-commerce retailers in the entire world, but the company scope far beyond than just a retailer. It has its own video provider, ‘Amazon Prime Video’. Owing to the amazing series and movies being telecasted in the Prime Videos, the platform has gained more than 150 million subscribers and has become the number two player in the U.S. subscription streaming world and still, the number is increasing. Whereas Netflix counts 167 million paid subscribers worldwide. You might not be aware, but you can also stream music on Amazon.
Amazon Web Services is now the largest cloud computing provider in the world. The company is at the heart of the “stay at home,” trend making this stock even more attractive. It led to a rise in the price of its shares and profits. And it is quite expensive. Currently, its stock is selling for around $3,200.
It is almost impossible to imagine the current consumer tech landscape without Apple on the top of it. Apple not only manufactures and sells smartphones, tablets, headphones, and watches, but also digital content, and software and has become a leader in “digital wallet” space.
In 2019, Apple launched its own streaming Apple+tv. In 2020, a new lineup of 5G iPhones is expected to be launched.
There are many reasons to hold Apple shares in your portfolio: Innovation, profitability, growth. In the current time, with a market value of $1.6 trillion, the share price of Apple is heading to a further increase. Apple has tripled in value for the last five years, and it is trading at approximately $390.
Now, we come to the next alphabet, ‘N,’ which stands for the streaming platform Netflix. Netflix is the biggest and most successful streamer, releasing new good content week after week. The company has seen an impressive rise in subscriptions during the lockdown periods imposed across the globe to curb the coronavirus spread.
Historically, the stock has outperformed the market. And the value is inevitably going to go higher. Currently, the stock is trading at around $490.
The last alphabet in FAANG stands for Google. Most investors still know it like Google, even though the internet search giant reorganized as holding company Alphabet in 2015.
Google is the world’s most visited website, and has a growing presence across enterprise cloud, Google Drive storage, and Google suite applications: from Gmail to Chrome, and Docs, Sheets, and Slides. Google is a highly profitable company, which makes its stock a core for any investor’s portfolio. Currently, the share is trading at around $1500.
Should One Invest in the FAANG Stocks?
The FANG stocks lately have been outperforming the broader stock market. However, you should buy them when the price looks right. All five stocks currently are trading at their record highs.
If you are seeking high returns, FAANG stocks are good to buy and leave for years. All five stocks can be considered for a long-term investment.