You might see these risks as being less likely, or you might simply find the potential rewards to be well worth the risks. Still, take your time to carefully weigh your options, and consider speaking with a financial advisor for more guidance on if/how FAANG stocks might fit into your portfolio. Alphabet is the parent company of Google (GOOG, GOOGL), but the company is far more than just a search engine. It also has its arms in areas ranging from cloud services to AI to self-driving cars (through the Alphabet subsidiary Waymo). Netflix (NFLX) is one of the most prominent streaming platforms that continues to deepen its library of original content and expand globally.
Positive news can lead to euphoria, driving prices up, while any negative hint can induce sharp declines. Their innovative ethos, global reach, and dominance in respective domains offer immense growth potential. Such innovations and product releases can spur investor enthusiasm, driving stock prices up or inciting caution if the launch misses expectations. Netflix and Alphabet (Google) have also shown strong TTM performance, with Netflix posting revenues of over $36.3 billion and a net income of $7.1 billion.
- This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research.
- By crafting well-structured, compelling responses, you’ll not only showcase your value as a candidate but also increase your chances of landing a role at one of the top tech companies.
- Its original content, from series to documentaries, sets trends, sparks debates, and represents a new wave in the entertainment industry.
- Tech stocks have been among the top-performing investments over the past two decades, but the tech rally has hit a wall in 2022.
What Are the Top Tech 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. Among the FAANG stocks, Alphabet has the most attractive relative valuation, trading at a price-to-earnings ratio at about 29. The company continues to add features to its Bard chatbot negative interest rates in the u s. and integrate its generative AI technologies across its other apps. The fact is that Alphabet has some big-time advantages like its thousands of talented engineers and massive troves of data.
Replacing Netflix with Microsoft bumps those percentages up to about 26% and 50%, respectively. Over the past 10 years, all of the MAMAA stocks have significantly outperformed the S&P 500. Over the past year, as of late October 2024, Netflix stock has jumped over 89%, and it what is a registered investment advisor has gained over 168% over the past five years, despite a big downturn during that stretch.
Should You Invest in Big Tech?
Our estimates are based on past market performance, and past performance is not a guarantee of future performance. The search platform contributed $104 billion to Alphabet’s total sales in 2020, making up half of the behemoth’s total revenue. Google has been the market leader in online advertising for well over a decade and is expected to command nearly a 29% share of digital ad spending globally in 2021, according to eMarketer. Obviously, past performance is no guarantee of future results, but these stocks have continuously proven themselves over the past ten years. Be sure to do your due diligence before investing in any company, however.
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Fortunately, Google Cloud revenue is still growing at an impressive 38% year-over-year clip. Other stocks like certain financial companies or those that sell consumer staples might have less upside but more stability. No mutual fund or exchange-traded fund (ETF) is solely devoted to the FAANG group.
When Cramer first coined the term FANG back in 2013, Facebook’s market cap was just $65 billion and the company was less than a year removed from its initial public offering (IPO) in May 2012. In the years that followed, Facebook grew from an unprofitable social media platform to a multi-platform online advertising behemoth. A good way to get access to tech companies is to invest in managed funds. These are designed to save you time and money by pooling your money with that of others and having an investment manager keep track of it. You have to pay a fee for the investment manager, but it can work out cheaper than buying stocks if you reckon you need an adviser. NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor.
With a daily average active user base of 3.27 billion people as of June 2024, Meta can claim over 40% of the world’s population as its customers. To monetize this extraordinary user base, Facebook sells ads targeted based on users’ personal preferences and usage patterns. For the past three quarters, the company has reported declining sales – the longest stretch since 2016. The other bets segment includes Alphabet’s moonshots, such as automated-vehicle business Waymo and health researcher Verily.
A trade war might impact supply chains, while economic downturns could affect consumer spending. Investors, ever watchful, adjust their strategies based on these macroeconomic indicators, leading to amaroq announces changes to its trading liquidity enhancement agreements shifts in FAANG stock prices. Any regulatory action or even the hint of impending legal challenges can sway investor sentiment, impacting stock prices. Offering platforms that drive social connections like Instagram, WhatsApp, and the core Facebook app, Meta is more than just a social media company. Instead, investors looking for ETFs that have heavy weightings of these could look to tech-heavy ETFs such as those that track the Nasdaq 100.
