The five largest firms in the world are Facebook, Amazon, Apple, Netflix, and Google. Will these large businesses continue to grow as the world economy rebounds?
The phrase “FAANG” was created in 2013 by CNBC network host Jim Cramer to describe the businesses as “completely dominant in their markets.” The acronym stands for Facebook (now Meta), Amazon, Netflix, Google (now Alphabet), and latecomer Apple, added to the list in 2017.
They are, together, the world’s fifth- and tenth-biggest businesses by market value. Apple is currently worth a staggering $2.9 trillion, while the five of them combined are worth around a twentieth of the S&P 500 stock index in the United States.
The FAANG stocks are not leaving anytime soon is universally acknowledged. As a result, they’re great long-term investments. Of course, no investment is entirely risk-free. Market downturns are woven into the fabric of investing, from the Tulip mania of 1637 to the pandemic-induced mini-crash in March 2020.
While UK FTSE 100 equities are excellent candidates for ultra-long-term investment, it’s worth noting that less than a third of the original hundred firms that debuted on the index in 1984 is still there. Some people believe that index investing is superior to investing in individual firms. Others feel it is better to give up some stability for greater profits. If you’re looking for a compromise, consider investing in one of the numerous Exchange Traded Funds (ETF) offered on IG, which is heavily invested in the FAANG stocks.
Google (Alphabet) has become a familiar phrase with a $1.95 trillion market capitalization. ‘Googling it’ is synonymous with an internet search, and Q3 results demonstrate Google’s advertising strength. The YouTube owner’s revenue increased to $65.1 billion, up from $46.1 billion in the same quarter last year, while net income increased from $11.2 billion to $18.9 billion. And advertising made up the majority of this revenue ($53.1 billion), compared to last year’s ($37.1 billion).
Furthermore, CEO Sundar Pichai stated, ‘As the digital transformation and shift to hybrid work continue, our Cloud services assist organisations in collaborating and staying secure.’ Cloud sales increased to $5 billion from $3.4 billion last year. It has a lot of potential, but it also faces significant risks. Because no other businesses have the financial capacity to compete in the cloud computing industry, it has an enormous opportunity to develop. However, antitrust claims could be its most severe issue, having just lost an antitrust appeal against an EU-imposed fine for favouring its price comparison service over rivals.
Facebook is the second FAANG stock with a market value of nearly $1 trillion and a price of $335 per share (NASDAQ: FB). It’s the world’s biggest social network, posting 35% growth in Q3 revenue to $29 billion and 11% more users to 2.81 billion people in the third quarter. It’s essential to recognize that many people are unemployed because they have chronic illnesses. According to this article, “nearly half of the world’s population” is affected by mental health issues—furthermore, revenue projections for Q4 range from $31.5 billion to $34 billion. The firm has a cash balance of more than $58 billion, which it is expected to use to transform itself into the metaverse’s centre.
Apple has a current price of $176 per share, making it the world’s most valuable firm. The iPhone and MacBook are Apple’s best-known products, high-end luxury goods purchased by millions of customers with ‘unrivalled customer loyalty.’ During the fourth quarter, Apple posted revenue of $83.4 billion, up 29% year over year.
With a cash dividend of 22 cents per share, the firm returned $24 billion to investors during the fourth quarter. Finally, with its distinctive features and growing popularity among consumers and manufacturers alike, the stock appears to have a good chance of rising even more in 2022. Furthermore, according to Morgan Stanley analyst Katy Huberty, innovative goods such as its virtual reality headset and the self-driving car could propel it further in 2022.
Amazon’s market value, at $1.75 trillion, has been up 8% over the past year. They are, however, 7% below their November peak of $3,421. In the same way as Google, the world’s largest e-commerce firm, is also a noun. According to its results, Amazon’s sales in Q3 were up 15% year over year to $110.8 billion. And since the pandemic began, Amazon has expanded its fulfilment centres twice as fast as other physical competitors have been forced to close by law. It’s also a big player in cloud computing services, with its AWS unit expanding 39% year over year. Of course, retail is a cutthroat business; rivals like eBay, Alibaba, and Walmart are constantly vying for market share.