What are FAANG stocks?
A common abbreviation in finance, “FAANG” stands for the stocks of five leading American technology companies: Meta (META) (previously Facebook), Amazon (AMZN), Apple (AAPL), Netflix (NFLX), and Alphabet (GOOG) (previously Google). The term was coined by Bob Lang, a contributor to The Street, and popularized by Jim Cramer, the host of CNBC's Mad Money, in 2013, who commended these companies for their “total dominance in their markets." The term "FANG" was initially used, with Apple—the second “A” in the acronym—added in 2017.
These five FAANG stocks are among the largest companies in the world, with a combined market capitalization of around $7 trillion as of Q1 2022. They are also widely known among consumers, attracting prominent and influential investors such as Berkshire Hathaway, Soros Fund Management, and Renaissance Technologies. Each FAANG stock trades on the Nasdaq exchange and is included in the S&P 500 Index. As of August 2021, the FAANGs made up about 19% of the S&P 500—a remarkable figure considering the S&P 500 is commonly viewed as a proxy for the US economy as a whole.
FAANG became MAMAA
Cramer and other tech investors have proposed a new acronym for the top tech stocks: MAMAA. This stands for Meta, Amazon, Microsoft, Apple, and Alphabet. Microsoft has replaced Netflix as the fifth group member, thanks to its strong software and cloud services business. Microsoft has over $1 trillion market cap, while Netflix has fallen to $130 billion.
MAMAA is the new name for the leading tech stocks in 2023