Why Fang Stocks Won’t Quit
Recently, Google’s stock price has climbed about 15%. Analysts state that this is mainly do to increased revenues of 23% to $110.855 billion. And no doubt, the advertising portion of Google continues to be an omnipotent force in the industry, consistently outperforming estimates. The steady exponential growth that Google Adsense or Adwords have garnered over the industry has equated to a rough increase of 29% to the company’s bottom line. Finance bloggers and inside journalists alike believe this momentum will not likely continue.
However, regardless of whether you believe this strong growth will continue, or if you believe that it will continue at a slower pace, I am still very bullish on everything Google, and here’s why.
Google is a part of the exclusive club the market deems the ‘FANG’ stocks. It stands for Facebook, Amazon, Netflix and Google, and it is a group of stocks that just continue their ascent to world domination. Google, just like the others in this group always remains a strong buy for me and the reasoning is simple.
To the millennial generation, as opposed to our predecessors, there is only a handful of companies that are truly valuable. In older generations there were things such as brand loyalty, which is no longer as prominent as it was years ago. Things have turned from brand loyalty to firms making themselves indispensable in the eyes of the consumer. In other words, people (and more specifically millennials) are different in the sense that we aren’t loyal to brands, but rather we are basically at the whim of a handful of companies that are out their. For example, if you told me I couldn’t use Microsoft products for the rest of my life, it is something that may be an inconvenience, but nothing I would be that upset about. On the other hand, if you told me I couldn’t use Netflix or Google it would be a totally different story.
And this is the center concept of what makes the FANG stocks such a great group of companies. They have effectively made themselves indispensable to the population, and the younger population specifically. The simple fact is there really isn’t many other companies (except maybe Apple) that can say they have accomplished the same thing, making their products a necessity to use and own. And for that reason, analysts outlooks, or upcoming quarterly projections are in some way ancillary when it comes to not only Google, but FANG in general. To be in that group, in that rarified air, means that you have effectively made yourself not a want, but a need in the millennial generation. And that is why they will continue to make their investors money.