What's Up With FANG (or FAANG or FAAMG)?

Acronyms! Every industry has them, and whether you find them handy shortcuts or an overall annoyance, it can be crucial to know what they stand for to stay on top of your game. When it comes to investing, one that may have caught your attention recently is FANG, or maybe a variation like FAANG or FAAMG.

While it sounds like something right out of the X-Men superhero franchise, FANG and its related acronyms refer to the names of various powerhouse technology stocks. They're shorthand terms used, in part, to acknowledge the collective impact these big tech firms have on the markets.

What does it mean?

FANG = Facebook, Amazon, Netflix, Google

CNBC's Jim Cramer, host of the television program Mad Money, is credited with creating the term FANG back in 2013 to describe a group of tech stocks. If you've seen his show, it goes without saying there were vampire teeth graphics and references to "sinking your teeth in." (Today, of course, FANG would be FANA since Google is now owned by parent company Alphabet.) Since Cramer coined the term, some analysts have added an extra A for Apple (FAANG), or two extra As (FAAANG) for Adobe and Broadcom, which has the ticker symbol AVGO. More recently, Cramer has been using FAAA, which refers to Facebook, Amazon, Alibaba and Alphabet.

Perhaps the biggest change to the acronym so far came in June 2017, when Goldman Sachs released a research report that updated the term to FAAMG.

FAAMG = Facebook, Apple, Amazon, Microsoft, Google

Netflix didn't make the cut in this updated version.

Keep in mind

FANG stocks, regardless of which acronym is used, account for about half of the top 10 largest companies in the S&P 500 composite index. The tech sector alone made up nearly one-quarter of the market weight of the S&P 500 at the end of October, 2017. So, a collective up or down in these tech shares can lead to a corresponding increase or decrease in the S&P 500.