According to the data provider FactSet, since 2012, mutual fund, pension fund
and hedge fund holdings of stock in the five technology giants have more than doubled, to $1.4 trillion, from $558 billion — a consequence of investors’ buying up stocks that are rapidly increasing in value.
In the last three years, their share prices have risen far faster than the major market indexes — Amazon leads the way, up 206 percent;
Apple trails the pack with a 67 percent gain — as investors of virtually every stripe have piled into these companies.
For example, the current stock market size of the Faang companies is $2.4 trillion, or about 13 percent of the size of the United States economy.
“So yes, you can see how valuations would get extended.”
Technology companies make up the five most valuable companies in the world by market capitalization.
While skeptics see just $2 billion in earnings, he and his analysts see a company
that has generated more than $15 billion in cash and is ready for a higher market rating because of the profitability of its web services division.
“Yet that is how the market is pricing it.”
Another well-known value manager who is betting big on Faang stocks is Chris Davis, the lead
stock picker for the $11.8 billion New York Venture Fund, where Amazon is his top position.