FAANG valuations far exceed earnings, resting on speculation not profit

Evidence

By the end of 2023, these five companies together held a market capitalization of 7.4 trillion, a value bigger than the gross domestic product of all but two countries; only the U.S. and China are bigger than FAANG. However, total net income for the FAANG companies in 2023 was only 225 billion, a lot of which came from Apple’s lucrative iPhone sales, so the massive market capitalization of FAANG is an extreme form of investor speculation. — Andrew deWaard, Derivative Media, 314

Categorization

• XREF: This is exactly the kind of concrete valuation-vs-earnings data the reader needs to trace speculation from Wall Street to streaming; connects to the Milgrom and trust literature on speculative capital and to later claims about streaming economics.