These companies are also known as The Big Five and they play an important role in the tech space and the stock market in general.
How do GAFAM stocks work?
These five companies are often referred to as the GAFAM stocks due to their dominance in the technology sector and their massive market capitalizations. The success of these companies has led to a significant influence on both the tech industry and the global economy as a whole.
How to invest in GAFAM stocks
Investors who are interested in GAFAM stocks can consider GAFAM mutual funds, ETFs, or index funds. They can invest in individual GAFAM stocks directly or through exchange-traded notes (ETNs). Investors also have the option of investing in more than one GAFAM company by creating a basket of stocks and buying funds that invest in all five companies.
GAFAM vs FAANG
- GAFAM stands for Google (Alphabet Inc.), Amazon, Facebook, Apple, and Microsoft. FAANG stands for Facebook, Amazon, Apple, Netflix, and Google (Alphabet Inc.).
- FAANG includes Netflix while GAFAM does not. GAFAM includes Microsoft while FAANG does not.
- FAANG is focused on companies that are primarily consumer-facing, while GAFAM includes companies that have a wider range of offerings, such as cloud computing services and enterprise software.
Key point
GAFAM stocks refer to the stocks of the technology group, Google (Alphabet Inc.), Amazon, Facebook, Apple, and Microsoft.
GAFAM stocks are significantly important in the stock market and they influence how the market flows. Investors and analysts usually use them as a guide to predict the market. It is important to know that although they are capable of disrupting the market, their influence is not hundred percent.
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