Investing remains a popular choice for people around Harrogate who want to generate wealth and put some of their spare cash to work. This is easy in the digital age, where online investment portals make investing simple and accessible.
If you choose to start building up an investment portfolio, what you invest in is key to focus on. There are lots of sectors and a diverse range of assets to select from after all! Stocks are often the first asset people invest in because they’re easy to understand, familiar and offered at all top trading platforms.
FAANG stocks are something which you might come across when doing this – but what are they and why are they so important?
What are FAANG stocks?
FAANG stocks refer to the world’s most popular tech stocks and have been something savvy UK investors have known about for a while now. The name itself is an acronym and is made up of the first letters of the stocks included – Facebook (now known as Meta), Amazon, Apple, Netflix and Google (also known as Alphabet).
Interestingly, this group of tech shares was known as FANG pre-2017 and before the success of Apple saw it included. The individual stocks which make up FAANG were chosen for their strong performances in the market and the hype this created around them.
Why are FAANG stocks so crucial?
The major reason FAANG stocks are so important is the impact their performance can have on global financial markets. This comes down to the multi-national reach of the companies which make FAANG up and their sheer size. All of the companies included provide products/services to global consumers and dominate markets like the UK.
FAANG stocks are also important for how successful they’ve been in recent years and how much their value has grown. All of this means that how stocks within FAANG are performing can have a noticeable effect on financial markets and how investors react to this.
These stocks have also become important for people who like to invest in global financial markets. FAANG shares, after all, contain familiar brands and names which people know about when choosing which assets to buy. Big firms like Netflix have lots of data on their financial performance available publicly and this makes investments into them simpler to research.
FAANG stocks: What should you know about each one?
Although their historically strong performance explains why this group of shares has become popular with investors, it’s always wise to know more about them before diving in. But what’s the story behind each of the stocks included in FAANG?
Facebook (now known as Meta)
Although it changed its name to Meta recently, these shares are still referred to as Facebook for FAANG purposes. The company was originally launched in 2004 and Facebook is now one of the world’s top social media platforms.
Meta also has lots of well-known subsidiaries in this space, such as WhatsApp and Instagram. Online advertising via platforms like this remain its main income source and has allowed it to have a market cap value in the trillions.
Amazon
Most people know about e-commerce titan Amazon and have used it to buy goods online in the past. First launched in 1994 by Jeff Bezos as a digital bookshop, it has expanded over time to sell a much wider range of goods.
The summer of 2024 saw it hit a market cap of over $1.8 trillion, which explains why it is a stock within FAANG which is rated so highly by investors. As the demand for e-commerce in general shows no signs of slowing down, Amazon should continue to reap the benefits of this.
Apple
The oldest individual FAANG stock, Apple is a tech giant which is best known for its computing devices, tablets and smartphones. The most obvious example of this is their iPhones, which have sold huge amounts on a global scale. North Yorkshire police’s iPhone app further shows how Apple have become key to modern life.
Apple was worth over $2.9 trillion as of June 2024 and remains one of the top players in not only the tech sector but global business markets.
Netflix
As with other FAANG stocks, Netflix is a brand people around Harrogate will be familiar with. An online steaming service which now produces its own exclusive content, it provides on-demand TV and movies for subscribers to enjoy. Although stiff competition in the online streaming niche has challenged this stock, it still had a market value of around $275 billion in 2024.
This firm is now officially named Alphabet but remains known as Google for FAANG purposes. It’s one of the most famous businesses in the tech sector and commonly associated with its popular search engine.
Since forming in 1998, it has undergone huge growth and broadened its services to include software, online ads, quantum computing and more. This led to it being one of the most valuable companies globally and a key part of FAANG.
What next for FAANG stocks?
This group of stocks has been a popular choice for investors for a long time now due to the returns they offered and the growth they saw. Harrogate’s UK leading tech sector also means people in the town like to put money into these kinds of shares. But what might the future hold for them, as past performance does not guarantee future gains?
This of course is hard to say for sure, as the financial markets dance to their own tune. It’s safe to say though that they will remain a popular investment choice and that the companies within them should continue to perform well in general. Demand for things like e-commerce, smartphones or online streaming is not going anywhere soon and FAANG stocks should benefit from this.
FAANG stocks: A key part of global investing
For UK investors, FAANG stocks are worth knowing about. This is because they form a key part of the global financial market, and their performance can have a major impact on how markets move. These stocks are also viable assets to look at investing in and help to give people a route into the tech niche.
