FAANG is an acronym given to the top 5 American tech giants, namely, Facebook, Apple, Amazon, Netflix and Google’s parent company Alphabet. These companies are known for the explosive growth rate and valuation. Each of the five companies have established market dominance in their respective domains: Facebook in social media, Apple in technology hardware and electronics, Amazon in e-commerce, Netflix in online streaming, and Google in search engine and web services.
The 5 tech giants have spread their footprints across the world by acquiring companies and products world over either in a full buy-out or through equity share. The FAANG stocks have a combined capitalisation of approximately $5 trillion, almost nearing the US Federal Reserve Balance Sheet which stood at $5.3 trillion in May 2020 according to CNBC.
These superstocks are not just surviving the coronavirus pandemic but are instead thriving. At a time when the world is facing mass unemployment, mounting bankruptcies and falling growth rates, these mega tech companies have recorded steep growth curves. This is reflective of the fact that these companies have the resources and capacity to weather out any storm. Additionally, it also shows that the pandemic has only increased the reliance of people on technology.
Internet penetration rose by almost 23% in the first month of lockdown, ie during March. As the world has experienced a complete lockdown since then, people world over have taken to internet for work and leisure. The FAANG companies have recorded maximum growth in user base during this pandemic with more unique users entering the tech world.
Seema Shah, Chief Strategist at Principal Global Investors, told CNN, “Tech companies are thriving. No physical contact and lockdowns mean that this is a crisis that almost works in technology’s favor.”
Amazon and Netflix have come out on top among the FAANG companies with a sharp surge in sales and revenue. Apple has been struggling to keep up its demand and supply due to a disrupted supply chain, however, still reported a 1% increase in the first quarter of 2020.
Google and Facebook have reported decreasing ad revenues although Alphabet’s ad sales still grew during the first quarter, just not as much as before.