BROWSE

FAAMG Stocks

What is 'FAAMG Stocks'

FAAMG is an abbreviation coined by Goldman Sachs for five top performing tech stocks in the market, namely Facebook, Amazon, Apple, Microsoft, and Alphabet’s Google.

Explaining 'FAAMG Stocks'

Roughly 3,000 companies (mostly tech companies) trade on the NASDAQ and the Nasdaq Composite provides an indication of how the tech sector is faring in the economy. Facebook (FB), Amazon (AMZN), Apple (AAPL), Microsoft (MSFT), and Alphabet (GOOG)  account for 55% of the NASDAQ’s year-to-date (YTD) gains, as of June 9, 2017. Also, FAAMG stocks account for 37% of the returns of the S&P 500 index, which tracks the market capitalization of 500 large companies across various industries trading on the NYSE and NASDAQ.

Is There a FAAMG Bubble? 

FAAMG has been likened to the tech stocks that were prevalent in the market before they crashed in the 2000 tech burst. Historically, growth stocks have a higher volatility than the market due to their risky ventures. However, FAAMG stocks have a valuation with an unusual low volatility, which bears a semblance to pre-dotcom crash tech stocks. While analysts, notably from Goldman Sachs and UBS, have expressed doubt in the continued low volatility of the tech giants, they agree that these tech stocks in the digital era still have plenty room to grow as they delve into new technological ventures in machine learning, big data, cloud computing, social media, video streaming, Artificial Intelligence (AI), block chain, and e-commerce systems.


Further Reading


ТЕХНОЛОГІЧНИЙ СЕКТОР СІНА-ІНВЕСТИЦІЙНА «БУЛЬБАШКА»?
jeej.tneu.edu.ua [PDF]
… Whether or not FAAMG or growth stocks in general are overvalued is a question I leave for the investment community … “Common Risk Factors in the Returns on Stocks and Bonds.” Journal of Financial Economics 33: 3–56 … “The Cross-Section and Time Series of Stock and Bond …

Spotify's Direct Listing: Is It a Recipe for Gatekeeper FailureSpotify's Direct Listing: Is It a Recipe for Gatekeeper Failure
heinonline.org [PDF]
… Whether or not FAAMG or growth stocks in general are overvalued is a question I leave for the investment community … “Common Risk Factors in the Returns on Stocks and Bonds.” Journal of Financial Economics 33: 3–56 … “The Cross-Section and Time Series of Stock and Bond …

Exploring industry-wide responses and perception of techfins entering the marketExploring industry-wide responses and perception of techfins entering the market
lutpub.lut.fi [PDF]
… Whether or not FAAMG or growth stocks in general are overvalued is a question I leave for the investment community … “Common Risk Factors in the Returns on Stocks and Bonds.” Journal of Financial Economics 33: 3–56 … “The Cross-Section and Time Series of Stock and Bond …

¿ Una nueva burbuja bursátil en el mercado tecnológico? El caso de las FAG (Facebook, Amazon y Google)¿ Una nueva burbuja bursátil en el mercado tecnológico? El caso de las FAG (Facebook, Amazon y Google)
uvadoc.uva.es [PDF]
… Whether or not FAAMG or growth stocks in general are overvalued is a question I leave for the investment community … “Common Risk Factors in the Returns on Stocks and Bonds.” Journal of Financial Economics 33: 3–56 … “The Cross-Section and Time Series of Stock and Bond …



Q&A About FAAMG Stocks


How much of the S&P 500 has been contributed to by these 5 stocks?

37% of returns from this index over this time period.

Who are FAAMG stocks?

FAAMG stocks are Facebook, Amazon, Apple, Microsoft and Google.

How much of the Nasdaq Composite has been contributed to by these 5 stocks?

55% of the year-to-date gains as of June 9th, 217.

How many years has Facebook been one of the top five largest U.S.-listed public companies by market capitalization?

Since 2012

Why are they called FAAMG Stocks?

They are called this because they represent four of the five top U.S. publicly traded companies by market capitalization as of May 2017.

How long has Apple been one of the top five largest U.S.-listed public companies by market capitalization?

Since 2010

What is FAAMG?

FAAMG is an abbreviation coined by Goldman Sachs for five top performing tech stocks in the market.

How many years has Microsoft been one of the top five largest U.S.-listed public companies by market capitalization?

Since 1986

Where can you find information on each company's stock price history?

You can find information on each company's stock price history at Yahoo Finance or Google Finance .

Why have these 5 stocks had such a large impact on their respective indices?

These companies are considered growth stocks due to their risky ventures and high volatility but they have a very low volatility compared to other growth stocks which makes them similar to pre-dotcom crash tech stocks.

What do these companies have in common?

These companies all have a market capitalization of over $500 billion.

How many years has Amazon been one of the top five largest U.S.-listed public companies by market capitalization?

Since 2015

What are the five companies that make up FAAMG?

Facebook, Amazon, Apple, Microsoft and Alphabet.