What Are GAFAM Stocks?

GAFAM is an acronym for five popular U.S. tech stocks: Google (Alphabet), Apple, Facebook൲ (Meta), Amazon, and Microsoft. 

GAFAM is quite close to, but nonetheless different than, the more popular FAANG acronym which collectively indicates U.S. technꦆology stocks: Facebook, Apple, Amazon, Netflix, aꦑnd Google. In the latter, Netflix takes the place of Microsoft.

Understanding GAFAM Stocks

While a lot of 澳洲幸运5开奖号码历史查询:market indexes exist to collectively track the developments of a sector, there are a handful of companies that lead the pack in terms of sector influence. FAANG, GAFAM, and BATX are acronyms for influentiওal companies that have a large impact on their sectors, and the market as a whole.

GAFAM is made up of Alphabet Inc.(GOOG), Apple Inc. (AAPL), Meta (META) (澳洲幸运5开奖号码历史查询:formerly Facebook), Amazon.com Inc. (AMZN), and Microsoft Corp. (MSFT). All five companies are listed on the NASDAQ stock exchange.

GAFAM Versus FAANG

Among the commonly used FAANG group of companies, Netflix is the only one belonging to the “澳洲幸运5开奖号码历史查询:consumer services” sector and “consumer electronics/video chains” sub-sector owing to its media content business, while the other four belong to the “澳洲幸运5开奖号码历史查询:technology” sector.

The term GAFAM was coined to replace 🥀Netflix with Microsoft in the list, making it a group of moreꦛ technology-focused companies.

While Amazon is also classified under the “consumer services” sector and “catalog/specialty distribution” subsector, it also has its 澳洲幸运5开奖号码历史查询:cloud hosting business and Amazon Web Serviceꦦs (AWS), which make it a significant contributor to the techꦉnology space.

Essentially, GAFAM represents the U.S.'s technology leaders whose products span mobile and desktop systems, hosting services, online operations, and software products.

The five GAFAM companies have a joint market capitalization of around $4.5 trillion and are all within the top 10 companies in the US according to 澳洲幸运5开奖号码历史查询:market capitalization as of March 31, 2020.

Among GAFAM stocks, the oldest company to list on the stock exchange is Apple which had its 澳洲幸运5开奖号码历史查询:initial public offering (IPO) in 1980, followed by Microsoft in 1986, Amazon in 1997, Goog💎le in ꦰ2004, and Facebook in 2012.

Example How GAFAM Is Used in the Real World

Alphabe📖t, Apple, Meta, Amazon, and Microsoft are big players in the technology space.

Many investors believe that if these stocks are doing well, the entir🧸e sector ꦛlikely is as well. In a way, these stocks act like an index for the technology sector.

Heading into early 2020, the 澳洲幸运5开奖号码历史查询:Nasdaq 100 index was rising. GAFAM stocks were also rising. Meta was the fཧirst one to break lower, peaking in late January 2020. The other GAFAM stocks and the Nasdaq 100 continued to advance.

Apple put in its peak on Feb. 12, Microsoft on Feb. 10. The Nasdaq put in its peak on February 19. Therefore, by the time the Nasdaq peaked, three of the five GAFAM stocks were already heading lower. Alphabet and Amazon peaked on the same day as the Nasdaq (澳洲幸运5开奖号码历史查询:closing price basis).

Monitoring the GAFAM stocksꦏ may have alerted investors that the technology sector was weakening, even though the Nasdaq 100 was still rising. That said, GAFAM stocks are no🗹t always a reliable indicator of what the sector will do.