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The acronym “FANGMAN” was derived by traders to further examine the combined strength of the 7 biggest tech establishments in the stock market. Check everything you need to know about major players and their performance in the tech industry.
The acronym FANGMAN stands for Facebook Inc., Apple Inc., NVIDIA corp., Google llc., Microsoft corp., Amazon.com, Inc., and Netflix Inc. They represent the 7 biggest tech-based countries on the globe. As of 2019, the collective market capitalization of all 7 firms was almost $4.2 trillion.
All these companies started from humble beginnings, moving from zero to world-renowned conglomerates. Facebook Inc. was formed at Harvard in 2004 by Mark Zuckerberg, Eduardo Saverin, Andre McCollum, Dustin Moskovitz, and Chris Hughes. Membership was first restricted to students of Harvard but was later spread to other schools and the rest of the world. Zuckerberg currently owns Whatsapp, and Instagram, establishing him as the King of all social media. He became the youngest billionaire at 23 and is currently worth around $83 billion.
Apple Inc. is a multinational tech-based firm that was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne back in 1976. The firm produces hardware products that encompass all iOS devices. It was spearheaded by Steve Jobs who died in 2011 and was then replaced by Tim Cook who was COO under Jobs. His current net worth is valued at $1.3 billion.
NVIDIA Corp. is a tech-based organization that produces Graphics Processing Units for gaming units with the label “GeForce”. The organization was started in 1993 by Jensen Huang, Curtis Priem, and Chris Malachowsky. The firm is spearheaded by Jensen who acts as CEO and is currently valued around $6 billion.
Google LLC. is an international establishment that was set up in 1998 by Larry Page and Sergey Brinn, a major subsidiary of a conglomerate known as Alphabet Inc., with its net worth at $66 billion and $62 billion respectively. The organization is however headed by Sundar Pichau who acts as the CEO and has been in office since 2015 and is currently valued at $2 million.
Microsoft Corp. is an America based international organization that was started by William Gates and Paul Allen in 1975. It specializes in software products with a few branches into hardware like the Xbox console. Paul was ranked as the 44th richest person on earth as at the time of his death while Gates remains the 2nd richest man after Amazon Inc. founder, Bezos.
Amazon Inc. is one of the biggest international tech establishments in America and the world today. It started out in the garage of Jeff Bezos which was used as a makeshift office. The firm is run by Bezos who is the chairman and Chief Executive Officer. Despite paying alimony of $38 billion to his ex-wife in the recent divorce proceedings, he is still with a net worth of $153 billion, making him the richest person in the world today and on track to becoming the first-ever trillionaire by 2026.
Netflix Inc. is a subscription-based media service provider that was started in 1997 by Reed Hastings and Marc Randolph. The firm is aimed at delivering current and old movie and tv-series content for streaming by their subscribers. It currently has up to 200 million subscribers in the world and is led by Reed who acts as chairman and CEO and is currently valued at $5 billion.
Pre 2018, FANGMAN securities had a mean Price to earnings percentage of 69%. One of the best runs of stock investors had ever seen in the market. Between 2014 and 2018, Netflix Inc. had the best stock performance, a staggering 400% with Google LLC. having a mere 100%.
Over the next 12 months, the stocks suffered downs up to 23% but began to recover their form early 2019 to the relief of many traders who had to sell out the majority of their trades to avoid running into losses. Despite the recuperation, the mean P/E percentage is still as low as 43%, the least it had been for the last 4 years. It can be concluded that the growth of these establishments has been based on their revenue because although the current net worth of these firms is almost 3 times the size it was as of 2014, the mean P/E ratio remains the same.
Although they have a combined high P/E percentage, some shares are doing better than others. Amazon Inc. and Netflix Inc. stocks have the highest value as compared to others. Google Ilc., NVIDIA corp., Microsoft corp., and Facebook Inc. are thought of as being in the middle-class value while Apple Inc. has the lowest valued securities, making them the target for value traders.
It is the wonder of many traders today if the FANGMAN stocks can perform and grow as well as they did over the last 5 years before the horrible dip. Analysts have gone to work, to determine the approximate yearly revenue development rate and have, through quantitative calculations, determined that over the next 5 years, only Google is expected to slightly improve by a bare minimum of 1% in comparison to the previous 5 years while the others suffer minor declines save for Amazon Inc. and NVIDIA Corp. ending up as the biggest losers.
Nevertheless, Apple Inc. leads the rest with a stock improvement of about 40%, edging out Facebook Inc. with an improvement of roughly 35%, amidst the controversy and privacy-related lawsuits they suffered. With the influence of hackers and the introduction of new contenders in the online video streaming trade, Netflix Inc. suffered a 3% loss in share value.
At the beginning of the “trade war” between China and America, with China stating that it would demand a $60 billion tax on all American exports, and America retaliating by demanding triple that value from China, all FANGMAN stocks suffered, falling by a mean 2.5%. Things later began to improve, after President Trump implied that the war would end in soonest, with FANGMAN stocks improving by an average of 1.7%.
On June 11, 2020, the top five tech companies in the world, Facebook, Apple, Google, Microsoft, and Amazon (FAGMA) lost about $270 billion in value, with Microsoft Corp. contributing to almost $80 billion to that number. The value of their stocks dropped as high as 5%, alongside Facebook Inc. with Amazon Inc. coming out as the “biggest winners” with a 3.4% dip.
Netflix Inc. and NVIDIA Corp. however, have enjoyed considerable increases in their stock values. With the inability of people to move around, they have resorted to online video streaming and game services which Netflix and NVIDIA provide.
As of May 2020, NVIDIA shares have gained up to 50%, with 20% coming in May, with net income expected at almost $2 per share in contrast to the originally predicted $1. NVIDIA has also predicted over 20% increase in gaming sales, and almost 70% increase in data-center sales due to the high clamor for consoles and PC games, totaling to almost $1.1 billion, making it the first-time sales in data-center would hit the $1billion mark.
Netflix Inc., on the other hand, is experiencing a huge increase in patronage with confinement in homes. They are however suffering from the inability to disburse funds on movies, and have as well had to postpone the release dates for several of their movie contents by at least 3 months. The huge increase in patronage is however expected to decline once the quarantine is over and people resume back to their normal schedules. Netflix Inc. has however recorded nearly 16 million paid viewers from outside America, as opposed to the 7 million originally predicted by Wall Street.
Although, international revenue has been reduced due to the growing strength of the dollar. Using Nigeria as an example, where monthly subscription used to be around $8.05 but has now reduced to $7.4. Regardless of this fact, Netflix Inc. shares have risen by roughly 11% since the onset of the quarantine.
The FAANG “Bubble” came into existence in 2018, when all tech-based stocks began to down-size in value to almost 20%. Categorizing them with assets that exhibit downward trends. Due to the sharp decline in value, traders began to pull out investments from FAANG (Facebook, Apple, Amazon, Netflix, Google) stocks. Coupled with the fact that Facebook and Google were under fire for subscriber privacy cases. The collective 5 lost approximately $1 trillion in stock earnings that year.
Despite the current COVID-19 pandemic, experts have concluded that there is no Bubble. The collective FANGMAN has raised almost $6.5 trillion this year alone with Apple Inc. stocks contributing to almost a quarter of that number and it is just June. Thereby affording them the monetary backing to invest in other businesses.
The globe will continually be dominated by tech-based companies because technology is the way into the future. Despite the controversies that continually surround them and their establishments, FANGMAN has continued to play their part in the society, with each one of them giving back to the society in this time of need by donating sums to the government and providing relief items to feed America.