FAANGM vs S&P 500


  • The tech-related FAANGM stocks have continued to outperform, and account for 20% US market cap, a doubling in only five years ago. This has been a critical market driver.
  • They now trade at twice the market valuation, and the premium has never been bigger. We argue this is more than justified, and these stocks will only be stronger post-crisis.
  • They have more than twice the margins, profitability, and growth of market. Are net cash, globally diversified, and the crisis accelerating tech adoption, reducing regulatory risk, and cutting competition.

An acronym that originally referred to Facebook, Apple, Netflix and Google and the leadership that these four stocks had provided to market indexes. At Commerce Trust, we expanded the group to six companies, adding Amazon and Microsoft for an even longer acronym, FAANGM

The S&P 500
A market capitalization-weighted index of the 500 largest publicly traded U.S. companies. A company’s market capitalization is calculated as its current stock price multiplied by its total number of outstanding shares. Market caps change over time, with movements determined by daily stock price fluctuations, the issuance of new stock, or the repurchase of existing shares (also known as share buybacks).