It’s been the summer of FANG.
These tech companies have seen their share prices surge during the midst of a global pandemic, where many companies have seen their revenues decline and their values contract. The FANG stocks have been able to prosper during this time for a variety of different reasons.
Their Core Businesses Are Digital
At a time where businesses have had to transition, these four companies were already well-positioned.
The FANG companies are digitally oriented, meaning the main way they generate their revenues transact with their customers is through digital mediums. This is incredibly valuable during this time, as person-to-person transactions and in-person oriented businesses have had to shut their doors and shift the way they do business.
People Are Home
The pandemic forced everyone to stay home, which in turn led to more hours spent on social media, streaming, and online shopping.
Companies like Amazon have been incredibly well-positioned to capture more of people’s spending due to their digital platforms and their infrastructure. The way Netflix operates, allowing its customers to access an array of different entertainment and content through their platform, hasn’t changed or been affected in any way by the shift to remote work.
Their Connection To Consumers
Another possible reason why the FANG stocks may have experienced tremendous rallies over the past few months is the way they facilitate connection at a time when many people were isolated.
Facebook allows us to connect with friends and family. Google allows us to connect with information. Netflix allows us to connect with entertainment. And Amazon, through their warehouse and delivery services, connects businesses with consumers at a time where both need it most.
Their Ability To Produce
To be able to weather a global pandemic and economic shutdown is pretty remarkable. Based on how the FANG companies have managed to maintain operations, its no wonder their stocks are near their all-time highs.
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