What Are FAANG Stocks and FAANG Stock Performance?

February 15, 20237 min read
What Are FAANG Stocks and FAANG Stock Performance?
Share on facebookShare on TwitterShare on Linkedin

Key Takeaways

  • The acronym FAANG represents Facebook, Amazon, Apple, Netflix and Google, five of the most valuable tech companies in the world.
  • These stocks have an outsized effect on the S&P 500 as well as the NASDAQ 100 indexes.
  • Investors may have positions in these companies without realizing they do, because the stocks are included in a wide range of exchange traded funds, mutual funds and index tracking funds.

Facebook, Apple, Amazon, Netflix and Google — these five tech stocks have long been considered the tech industry’s benchmarks. They have exceptionally high value; they function in a high-growth area of the economy, and they have anchored many investment portfolios for quite some time.

Owing to their notoriety, the acronym FAANG was derived from the names of these mega-cap tech investment opportunities.

The FAANG Origin Story

While The Street’s Bob Lang is credited with coining the FAANG acronym, CNBC’s Jim Cramer is credited with popularizing it in 2013, when he touted the future prospects of Facebook, Amazon, Netflix and Google. The acronym gained an additional “A” when Cramer folded Apple into the grouping in 2017.

Google became Alphabet in 2015 and Facebook became a subsidiary of Meta in 2021. Netflix, with a market cap of “only” $156B, is no longer looked upon as the shining example of growth and prosperity it was once considered. Thus the “N” has been replaced by an “M” for Microsoft in recognition of that company’s market cap of nearly $2 trillion.

Thus, a new acronym emerged in 2022: MAMAA—for Meta (META), Amazon (AMZN), Microsoft (MSFT), Apple (AAPL) and Alphabet (GOOGL).

It should be noted that while all the former FAANG (now MAMAA) stocks depend upon tech, the Global Industry Classification Standard (GICS) consider Alphabet and Meta to be Communications Services stocks. Additionally, Amazon is looked upon by the GICS as a Consumer Discretionary stock.

FAANG Stocks Breakdown

(All financial quotes are in USD as of Feb 16, 2023)

Meta – The company ‘s social media platform, Facebook, is the world’s most popular. Meta also owns Instagram and WhatsAPP. The company has a market cap of $459.3B, its price to earnings (P/E) ratio is 20.1 and its year-to-date (YTD) return is 43.9%

Amazon – Far from the online bookseller it started out as being, Amazon has evolved into a global ecommerce behemoth. Its revenue streams also include cloud services, entertainment and advertising. Amazon’s market cap is $1.01T, its P/E Ratio is 84.47 and its YTD return is 18.7%.

Microsoft – The largest software company globally, Microsoft is home to the Windows operating system, the LinkedIn professional social media platform and the Xbox gaming system. The company also owns Azure cloud services. Microsoft has a market cap of $1.95T. Its P/E Ratio is 29.84 and its YTD return is 13.5%

Apple – While still a major player in the personal computing field, Apple’s income streams also include iPhones and AppStore sales, as well as Apple Pay, Apple Care, Apple TV and Apple Music. The company has a market cap of $2.5T, its P/E Ratio is 26.37 and its YTD return is 18.30%

Alphabet – The parent company of Google, Gmail, You Tube, Google Nest and Google Cloud, Alphabet has as its foundation the world’s most popular internet search engine. Advertising drives the company’s revenues. Alphabet’s market cap is $1.22T, its P/E Ratio is 20.96 and its YTD return is 6.9%.

Netflix – Single-digit revenue growth and fierce competition resulted in Netflix being demoted from the ranks of FAANG in 2022. The streaming platform’s market cap is $156.19B, its P/E Ratio is 35.8 and its YTD return is 17.8%

The Importance of FAANG Stocks

Numbered among the largest companies in the world, the FAANG stocks are also well known among investors and the general public alike. As of Q1 of 2022, the companies had a combined market cap of roughly $7 trillion.

Each of these companies’ securities trade on the NASDAQ exchange. They are also included in the S&P 500 index, where they comprise approximately 19% of the index. Because they are popular holdings in exchange-traded funds and mutual funds as well, most investors probably have at least a small position in each of these companies.

Given the influence they wield, any volatility FAANG stocks experience can ripple through the indexes containing them and have a significant effect on their performance. As an example, FAANG stocks were responsible for a 40% gain in the S&P 500 index between February and August of 2018. Their influence on the NASDAQ 100 is even greater, as they make up nearly 39% of that index. This means that investors holding funds with investments in either of those indexes, along with any individual holdings in these stocks, may be less diversified than they believe themselves to be.

Investing in FAANG Stocks

As mentioned above, many investors holding positions in exchange-traded funds or mutual funds probably already have a minor position in each of these stocks. While no mutual or exchange traded fund is dedicated specifically to equities in these companies, most tech funds do include them.

They can usually be found in broad-based market index funds as well. Any fund tracking the NASDAQ composite index will include them. The First Trust Dow Jones Internet Fund also includes FAANG stocks.

The stocks in the group also trade individually on NASDAQ. Because of this, it is possible to take positions in each of them and create a FAANG portfolio. There is a catch, though: investing in these companies is a capital-intensive proposition, as each of them boasts high share prices.

Are FAANG Stocks Good Investments?

Largely viewed as contemporary blue-chip investments, FAANG stocks have the advantage of being associated with companies that are known and used by a huge swath of the general public. As a group, they tend to do quite well, often outperforming the standard indexes.

That said, seasoned investors know that past performance should not be considered an indicator of future results. However, owing to their substantial presence in both the S&P 500 and the NASDAQ 100, FAANG stocks could continue to wield an outsized influence over the market for many years to come.

On the other hand, as Netflix investors have discovered, the mighty can stumble, or even fall. As successful as these companies have been, there is no such thing as a sure thing when it comes to investing,

Portfolio Diversification and Alternative Investments

This is why portfolio diversification in asset classes unrelated to the stock market is considered to be a wise investment strategy. Alternative investments can be a good way to accomplish this. Traditional portfolio asset allocation envisages a 60% public stock and 40% fixed income allocation. However, a more balanced 60/20/20 or 50/30/20 split, incorporating alternative assets, may make a portfolio less sensitive to public market short-term swings.

Real estate, private equity, venture capital, digital assets, precious metals and collectibles are among the asset classes deemed “alternative investments.” Broadly speaking, such investments tend to be less connected to public equity, and thus offer potential for diversification. Of course, like traditional investments, it is important to remember alternatives do entail a degree of risk.

In some cases, this risk can be greater than that of traditional investments.

This is why these asset classes were traditionally accessible only to an exclusive base of wealthy individuals and institutional investors buying in at very high minimums — often between $500,000 and $1 million. These people were considered to be more capable of weathering losses of that magnitude should their investments underperform.

However, Yieldstreet has opened a number of carefully curated alternative investment strategies to all investors. While the risk is still there, the company offers help in capitalizing on areas such as real estate, legal finance, art finance and structured notes — as well as a wide range of other unique alternative investments.

Learn more about the ways Yieldstreet can help diversify and grow portfolios.

In Summary

Considered among the blue-chip investments of contemporary markets, FAANG stocks can be found in nearly every technology-focused fund. As a result, many investors may have positions in these companies without realizing they do. This could result in less portfolio diversification than anticipated. Investing in alternatives with a platform like Yieldstreet can help ensure portfolio diversification in asset classes that may not be affected by market volatility.

All securities involve risk and may result in significant losses. Alternative investments involve specific risks that may be greater than those associated with traditional investments; are not suitable for all clients; and intended for experienced and sophisticated investors who meet specific suitability requirements and are willing to bear the high economic risks of the investment. Investments of this type may engage in speculative investment practices; carry additional risk of loss, including possibility of partial or total loss of invested capital, due to the nature and volatility of the underlying investments; and are generally considered to be illiquid due to restrictive repurchase procedures. These investments may also involve different regulatory and reporting requirements, complex tax structures, and delays in distributing important tax information.

We believe our 10 alternative asset classes, track record across 470+ investments, third party reviews, and history of innovation makes Yieldstreet “The leading platform for private market investing,” as compared to other private market investment platforms.

1 Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All securities involve risk and may result in significant losses.

3 "Annual interest," "Annualized Return" or "Target Returns" represents a projected annual target rate of interest or annualized target return, and not returns or interest actually obtained by fund investors. “Term" represents the estimated term of the investment; the term of the fund is generally at the discretion of the fund’s manager, and may exceed the estimated term by a significant amount of time. Unless otherwise specified on the fund's offering page, target interest or returns are based on an analysis performed by Yieldstreet of the potential inflows and outflows related to the transactions in which the strategy or fund has engaged and/or is anticipated to engage in over the estimated term of the fund. There is no guarantee that targeted interest or returns will be realized or achieved or that an investment will be successful. Actual performance may deviate from these expectations materially, including due to market or economic factors, portfolio management decisions, modelling error, or other reasons.

4 Reflects the annualized distribution rate that is calculated by taking the most recent quarterly distribution approved by the Fund's Board of Directors and dividing it by prior quarter-end NAV and annualizing it. The Fund’s distribution may exceed its earnings. Therefore, a portion of the Fund’s distribution may be a return of the money you originally invested and represent a return of capital to you for tax purposes.

5 Represents the sum of the interest accrued in the statement period plus the interest paid in the statement period.

6 The internal rate of return ("IRR") represents an average net realized IRR with respect to all matured investments, excluding our Short Term Notes program, weighted by the investment size of each individual investment, made by private investment vehicles managed by YieldStreet Management, LLC from July 1, 2015 through and including July 18th, 2022, after deduction of management fees and all other expenses charged to investments.

7 Investors should carefully consider the investment objectives, risks, charges and expenses of the Yieldstreet Alternative Income Fund before investing. The prospectus for the Yieldstreet Alternative Income Fund contains this and other information about the Fund and can be obtained by emailing [email protected] or by referring to www.yieldstreetalternativeincomefund.com. The prospectus should be read carefully before investing in the Fund. Investments in the Fund are not bank deposits (and thus not insured by the FDIC or by any other federal governmental agency) and are not guaranteed by Yieldstreet or any other party.

8 This tool is for informational purposes only. You should not construe any information provided here as investment advice or a recommendation, endorsement or solicitation to buy any securities offered on Yieldstreet. Yieldstreet is not a fiduciary by virtue of any person's use of or access to this tool. The information provided here is of a general nature and does not address the circumstances of any particular individual or entity. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of this information before making any decisions based on such information.

9 Statistics as of the most recent month end.

300 Park Avenue 15th Floor, New York, NY 10022

844-943-5378

No communication by YieldStreet Inc. or any of its affiliates (collectively, “Yieldstreet™”), through this website or any other medium, should be construed or is intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice, except for specific investment advice that may be provided by YieldStreet Management, LLC pursuant to a written advisory agreement between such entity and the recipient. Nothing on this website is intended as an offer to extend credit, an offer to purchase or sell securities or a solicitation of any securities transaction.

Any financial projections or returns shown on the website are estimated predictions of performance only, are hypothetical, are not based on actual investment results and are not guarantees of future results. Estimated projections do not represent or guarantee the actual results of any transaction, and no representation is made that any transaction will, or is likely to, achieve results or profits similar to those shown. In addition, other financial metrics and calculations shown on the website (including amounts of principal and interest repaid) have not been independently verified or audited and may differ from the actual financial metrics and calculations for any investment, which are contained in the investors’ portfolios. Any investment information contained herein has been secured from sources that Yieldstreet believes are reliable, but we make no representations or warranties as to the accuracy of such information and accept no liability therefore.

Private placement investments are NOT bank deposits (and thus NOT insured by the FDIC or by any other federal governmental agency), are NOT guaranteed by Yieldstreet or any other party, and MAY lose value. Neither the Securities and Exchange Commission nor any federal or state securities commission or regulatory authority has recommended or approved any investment or the accuracy or completeness of any of the information or materials provided by or through the website. Investors must be able to afford the loss of their entire investment.

Investments in private placements are speculative and involve a high degree of risk and those investors who cannot afford to lose their entire investment should not invest. Additionally, investors may receive illiquid and/or restricted securities that may be subject to holding period requirements and/or liquidity concerns. Investments in private placements are highly illiquid and those investors who cannot hold an investment for the long term (at least 5-7 years) should not invest.

Alternative investments should only be part of your overall investment portfolio. Further, the alternative investment portion of your portfolio should include a balanced portfolio of different alternative investments.

Articles or information from third-party media outside of this domain may discuss Yieldstreet or relate to information contained herein, but Yieldstreet does not approve and is not responsible for such content. Hyperlinks to third-party sites, or reproduction of third-party articles, do not constitute an approval or endorsement by Yieldstreet of the linked or reproduced content.

Investing in securities (the "Securities") listed on Yieldstreet™ pose risks, including but not limited to credit risk, interest rate risk, and the risk of losing some or all of the money you invest. Before investing you should: (1) conduct your own investigation and analysis; (2) carefully consider the investment and all related charges, expenses, uncertainties and risks, including all uncertainties and risks described in offering materials; and (3) consult with your own investment, tax, financial and legal advisors. Such Securities are only suitable for accredited investors who understand and are willing and able to accept the high risks associated with private investments.

Investing in private placements requires long-term commitments, the ability to afford to lose the entire investment, and low liquidity needs. This website provides preliminary and general information about the Securities and is intended for initial reference purposes only. It does not summarize or compile all the applicable information. This website does not constitute an offer to sell or buy any securities. No offer or sale of any Securities will occur without the delivery of confidential offering materials and related documents. This information contained herein is qualified by and subject to more detailed information in the applicable offering materials. Yieldstreet™ is not registered as a broker-dealer. Yieldstreet™ does not make any representation or warranty to any prospective investor regarding the legality of an investment in any Yieldstreet Securities.

YieldStreet Inc. is the direct owner of Yieldstreet Management, LLC, which is an SEC-registered investment adviser that manages the Yieldstreet funds and provides investment advice to the Yieldstreet funds, and in certain cases, to retail investors. RealCadre LLC is also indirectly owned by Yieldstreet Inc. RealCadre LLC is a broker-dealer registered with the Securities and Exchange Commission (“SEC”) and a member of the Financial Industry Regulatory Authority (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). Information on all FINRA registered broker-dealers can be found on FINRA’s BrokerCheck. Despite its affiliation with Yieldstreet Management, LLC, RealCadre LLC has no role in the investment advisory services received by YieldStreet clients or the management or distribution of the Yieldstreet funds or other securities offered on our through Yieldstreet and its personnel. RealCadre LLC does not solicit, sell, recommend, or place interests in the Yieldstreet funds.

Yieldstreet is not a bank. Certain services are offered through Plaid, Orum.io and Footprint and none of such entities is affiliated with Yieldstreet. By using the services offered by any of these entities you acknowledge and accept their respective disclosures and agreements, as applicable.

Investment advisory services are only provided to clients of YieldStreet Management, LLC, an investment advisor registered with the Securities and Exchange Commission, pursuant to a written advisory agreement.

Our site uses a third party service to match browser cookies to your mailing address. We then use another company to send special offers through the mail on our behalf. Our company never receives or stores any of this information and our third parties do not provide or sell this information to any other company or service.

Read full disclosure