Whether you know what it means or not, you're probably already keeping tabs on FAANG stocks, using their products and signing into their services.
FAANG has become a convenient shorthand for investors who want to follow the five most popular – and arguably most consequential – tech stocks of our time. Broken down, FAANG stands for Facebook (FB), Amazon (AMZN), Apple (APPL), Netflix (NFLX) and Google's parent company Alphabet (GOOG).
Not only are these companies popular with the broader public, but they're also incredibly valuable. Closely watched funds have been pouring money into these stocks in recent years, and last month the combined market capitalization of these companies hit $3.1 trillion. Volatility in 2018 raised some concerns about a FAANG bubble, though plenty of analysts remain bullish.
Whichever way the stocks move, you can expect the broader market to follow. As of the start of the year, FAANG stocks hold many of the top spots in the S&P 500 in order of market cap, including the second, third and fifth positions.
Every first Wednesday of each month we’re going to dig deeper into the vocabulary of finance, unpacking some of the jargon and buzzwords that you may see analysts throw around, but may not grasp entirely. As with any of Inside Finance's features, suggestions and feedback are welcome and encouraged, just hit reply to this email!