GAFAM Stocks

What are GAFAM Stocks?

GAFAM Stocks stands for Google, Apple, Facebook, Amazon, and Microsoft. This term was coined after FAANG (a term used to define the most popular technology companies across the world).

Also known as Big Five, the companies included in GAFAM meaning are the world’s most popular and dominating corporations.

What’s the Difference between FAANG and GAFAM?

If you compare the term GAFAM with FAANG, you will realize that only Netflix is replaced with Microsoft in the former. In FAANG, only the four companies are from the technology sector. Netflix is an entertainment company that offers a broad Range of shows, web series, and movies to customers. This makes it a completely unique and different Industry from the tech sectors. Basically, it belongs to the media business. If you have not noticed it yet, the term GAFAM has all the companies that were already included in FAANG, except for Netflix. Makers introduced GAFAM to add Microsoft to the list and replace Netflix. The idea was simple – they wanted to add all the tech-related companies to the list.

You might be wondering why Amazon is included in the list, considering that it happens to be a consumer services company. Well, Amazon does have a cloud-hosting business, which makes it a technology-focused business. With that being said, Amazon contributes to the technology sector with its AWS (Amazon Web services). In other words, GAFAM represents the leading US technology companies that offer computers, laptops, smartphones, hosting services, software development services, and other tech-related products.

The Big Five

The Big Five companies had a combined Market capitalization worth $4.1 trillion in 2018. What’s even more surprising is the fact that these companies were on the top of the NASDAQ stock exchange. In the Big Five, the oldest company that dates back to 1980 is Apple. It started its operations around 30 years ago and offered its first public offerings in the same year. Six years later, Microsoft launched its first product followed by Amazon in 1997. Last but not least, Google started its operations in 2004.

Since 2011, these tech-based companies have been dominating the sector. They are known as the most popular and valuable companies in the market. Amazon is the leading consumer-services online platform that holds 50% of the market share in all types of online sales. Apple introduces trending gadgets, such as smartphones, desktop, and smart appliances. Microsoft is still the most dominating company in terms of desktops and computers. Google is the leader in online searches, videos, and maps. Facebook is a social networking site with more than 3 billion active user accounts.

The technology-focused companies have replaced some of the most popular corporations, namely Royal Dutch Shell, BP, and Exxon Mobile. These companies dominated the NASDAQ stock exchange in the first half of the 21st century.

Bottom Line

Each company added to the GAFAM has a market value of $500 billion to around $1.9 trillion. Experts even believe that the digital world is not possible without these tech giants.