The FAANG acronym stands for Facebook, Apple, Amazon, Netflix and Google (owned by Alphabet). If you owned these stocks over the past 10 years you would be sitting on very good gains.
However, things aren't looking so rosy for some of them at the moment.
Facebook is under fire for its part in the data breach and privacy issues relating to Cambridge Analytica.
President Donald Trump has been aiming some of his Twitter tirades at Amazon due to its supposed cheap deal with US Post, although many market commentators believe President Trump is actually trying to hurt Jeff Bezos' Washington Post. Amazon's Echo speakers are under fire because Alexa supposedly might be listening to conversations all the time to listen for what people like and love and then show ads based on those likes.
Alphabet is being questioned, particularly in Europe, about its market dominance. It is already very powerful with its smartphone operating system Android, online search Google, online video YouTube, app store Google Play and navigation tool Google Maps. It also has Google Jobs, automated car project Waymo and its fibre network business.
Netflix is spending huge amounts of money on its own content because Disney is going to be launching its own online demand service in the next couple of years.
However, market commentators are correct in saying that all of these businesses are trading quite cheaply considering how much the profit has been growing each year and each quarter. Indeed, Alphabet is trading at around 25x forward earnings and is growing at 25% a year – it's my pick of the FAANG stocks.
Foolish takeaway
As a group I think these are the best blue chips to own over the next 10 years because they are the ones that are driving innovation, challenging other industries and constantly improving. The current prices could look quite cheap in a few years' time.
