If you’re an active investor or follow the business or financial news, you must have come across a bunch of acronyms used by news anchors or different people referring to particular companies.
In this article, we’re talking about what FAANG means and its alternative, GAFAM, which includes another vital part of the puzzle.
What does FAANG mean?
The acronym FAANG is used when mentioned the big five tech companies, namely –
- Amazon
- Apple
- Netflix
Initially, the term was just FANG as Apple wasn’t included in the mix. It was coined by Jim Cramer, financial TV host and co-founder of TheStreet.com, in 2013. According to Cramer, these companies belonged together because of their high growth stocks and, of course, the fact that they all deal in tech and web solutions.
Apple joined FANG in 2017 based on the growth of its internet services such as iCloud, Apple Music, Apple Pay, and so on, which massively impacted its revenues, eventually turning the acronym into what we know it today — FAANG.
Since its coinage in 2013, the term has stayed relatively the same except for the addition to Apple. Despite Google’s corporate name officially changing to Alphabet, the term has remained the same.
All these corporations may be American, but they have a global presence and have become household names and not to mention financial giants.
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What is GAFAM?
There are similar terms surrounding these giants as well, with the most popular one being GAFAM, used extensively in Europe. This one replaces Netflix with Microsoft and goes like
- Apple
- Amazon
- Microsoft
The difference between the two terms is actually quite subtle. You see, in FAANG, Netflix is the only company belonging to the consumer services and consumer electronics/video chains subsector. The other four refer to the full-on technology sector. So the term GAFAM was coined to replace Netflix with Microsoft and make the group entirely technology-based.
Also read: What does KOTD mean?
