The FAANG companies’ valuations are extreme speculation on future monopoly

Evidence

Along with Apple and Google, each a crucial interface for the digital consumption of film and television, this handful of tech stocks has come to be known as FAANG: Facebook, Amazon, Apple, Netflix, and Google. 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. Wall Street is literally banking on a future in which these five companies dominate and monopolize their respective industries, producing far more income to justify their valuation. — Andrew deWaard, Derivative Media, 314

Categorization

• CANDY: FAANG’s combined market cap ($7.4T) exceeding all national GDPs but the US and China is a striking bar-conversation datum.