These stocks have quite a few things in common.
They are all big-cap stocks that deal with internet services and technology products. Additionally, they are all considered growth stocks due to their rate of product and service development.
FANG stocks are commonplace in hedge fund management portfolios and are all ranked fairly high within the S&P 500. Due to their high ranking, fluctuations in FANG stock position can have an impact on the market at large.
Are FANGs Headed for Trouble?
Despite the fact that FANG stocks have a solid history of delivering favorable results, some analysts have drawn a comparison between FANG stocks and the late ’90s dotcom stocks. The combination of high levels of growth, high valuations, and low volatility means that some are concerned that FANG stocks are displaying bubble-like tendencies.
If Facebook, Amazon, Netflix, and Google cannot maintain the current rate of growth, they may be headed for a crash like the bursting of the tech bubble back in 2000.
On the other hand, there are those who believe that the next generation of tech that is on the horizon will provide ample momentum to power the growth of FANG stocks. The growth these companies are anticipated to achieve with their development of AI technology and machine learning is seen by many to likely be sufficient to power and sustain their growth.
In either case, there will be indicators to signal the future of these historically high-performing stocks. As of right now, it seems highly unlikely that any of these tech giants will disappear overnight. Much more likely, they will continue to grow and innovate—though at what rate of growth is anyone’s guess.
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