The FANGs have given the market a growth story that it really needed. Revenue growth in the S&P 500 has been tepid at best for years, and earnings per share growth has been driven mostly by buybacks. But the FANGs, for the most part, have been growing at a blistering pace.
Each of the FANGs dominates its respective corner of the market. Facebook is the other social media company with a business model that works. Amazon is the Walmart of its generation, but its bigger growth story is cloud computing. Netflix is the leader in new media. And Alphabet has the world’s dominant search engine and smart phone ecosystem.
None of these are cheap, mind you. Amazon trades for 179 times earnings, Facebook 60, Netflix 300 and Alphabet 30. But in a world starved for a growth narrative, they’ll likely stay expensive for a while.