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Tara Lachapelle

FAANGs Make It Difficult to Eat a Balanced Diet

Investors following the old wisdom of a diversified portfolio risk missing out as Big Tech soars.

Can’t get enough of Apple.

Can’t get enough of Apple.

Photographer: Yoshikazu Tsuno/AFP/Getty Images

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Just as the stock market isn’t the economy, five technology companies don’t represent the entire stock market — but you’d be forgiven for thinking so. Of the 9,000 or so companies in indexes that track the global stock market, just three — Amazon.com Inc., Apple Inc. and Microsoft Corp. — were responsible for 25% of the gain over the past five years, Nir Kaissar writes. The rally in U.S. tech stocks this year has overshadowed a dismal performance for industries such as automobiles, banks and energy, where the economic pain and uncertainty brought on by Covid-19 is perhaps better reflected. On Tuesday, Amazon, Apple, Google parent Alphabet Inc. and Netflix Inc. all set new closing highs. And the Nasdaq 100 index climbed to a record, led by a 39% surge in shares of Zoom Video Communications Inc. — yes, that Zoom, the only place where it’s now acceptable to pair a button-down shirt with sweatpants.