Investors who actively follow the stock market might be familiar with the FAANG acronym. It conveniently groups together some of the largest modern technology companies in the world, namely:

  • Facebook, which now trades under Meta Platforms
  • Amazon
  • Apple
  • Netflix
  • Google, which trades under Alphabet

The five stocks are known for their soaring long-term returns, with Amazon, Apple, and Alphabet each worth over $1 trillion today. While they're still some of the greatest companies investors can buy, there might be a new generation of FAANG stocks emerging. 

A panel of three Motley Fool contributors has just coined the CASH acronym, covering Cloudflare (NET -3.34%), Advanced Micro Devices (AMD -5.78%), and Shopify (SHOP 1.03%). Here's what makes them worth buying.

A disruptive cloud computing company

Trevor Jennewine (Cloudflare): The cloud computing industry is dominated by tech titans like Amazon Web Services (AWS), but Cloudflare has distinguished itself in several ways, and the company is growing at a tremendous pace.

Cloudflare operates a global edge cloud. Its infrastructure spans 275 cities, interconnecting with thousands of other networks, including every major internet service provider. That makes Cloudflare very fast. Its infrastructure sits within 50 milliseconds of 95% of the globe's internet-connected population, and internal studies suggest that Cloudflare is the fastest network in the vast majority of countries around the world.

Using that advantage, Cloudflare offers a range of application, network, and security services that accelerate and protect business-critical infrastructure, while eliminating the cost and complexity of managing network hardware on site. Cloudflare also provides developer tools that empower customers to create websites, design software, and write code directly on its network. Forrester Research recently recognized Cloudflare as the leader in edge development.

Additionally, Cloudflare is designed to support hybrid cloud and multicloud strategies. Think of its network as a single pane of glass that provides each customer with visibility, performance, and security across its entire IT ecosystem, from private data centers to public clouds. That differentiates Cloudflare from public cloud vendors, because those vendors tend to favor their own technologies.

Cloudflare grew its customer base 20% to 151,000 over the past year, and the average customer spent 26% more, underscoring an effective land-and-expand strategy. In turn, revenue skyrocketed 53% to $813 million, and the company generated $36 million in cash from operations. That meager cash flow may worry some investors, but Cloudflare puts its market opportunity at $135 billion by 2024 and management plans to run the business near breakeven for the foreseeable future to capitalize on that.

Given its competitive strengths and sizable market opportunity, the future looks bright for Cloudflare. That's why this growth stock is a buy.

The leader in high-performance computing

Anthony Di Pizio (Advanced Micro Devices): It's hard to find a product or service today that hasn't been digitized in some way, and it's made possible thanks to advanced computer chips delivering smaller, cheaper, and more portable processing power. Advanced Micro Devices is a world-leading producer of such chips (commercially known as semiconductors), and it's the driving force behind some of the most popular consumer electronics.

The company's chips power both Sony's PlayStation 5 and Microsoft's Xbox, in addition to the infotainment systems in Tesla's line of electric vehicles. That should be enough to highlight AMD's importance to everyday life, but of course, the company does so much more. 

AMD has a booming data center segment, which grew 83% year over year in the second quarter of 2022, delivering $1.5 billion in revenue. The company has some of the largest providers of cloud services as data center customers including Microsoft (Azure), and two of the FAANG names -- Amazon (Amazon Web Services) and Alphabet (Google Cloud). 

But it's AMD's recent $49 billion acquisition of Xilinx that could be the real growth fuel in the long run. Xilinx is the adaptive computing industry leader, a technology that involves semiconductors that adjust to the users' requirements in real time, reducing the need to constantly swap out hardware. AMD believes this is the next frontier, and the newly combined companies will likely make for the undisputed leader in high-performance computing over the next 10 years and beyond.

AMD's market valuation stands at just $158 billion right now, which is measly by FAANG standards, but there's no question the company is as impactful to the technology sector as any one of the names in that acronym. Right now, AMD stock trades at a cheaper price-to-earnings multiple (25.5) than the Nasdaq-100 tech index (26.8), so it might be a great time to start building a position

This top dog is down, but not out

Jamie Louko (Shopify): Shopify has had its ups and downs recently, and the stock has certainly gotten punished for it. Shares of this e-commerce platform are down 78% from their all-time highs. Part of the reason for this is that the company is seeing e-commerce as a percentage of U.S. retail sales trend downward, and while e-commerce adoption is still higher than it was in 2019, it is falling back in line with pre-pandemic growth projections. 

However, e-commerce is expected to become increasingly popular, and Shopify will likely benefit. The company enables small businesses to start, run, and grow their operations to help compete with bigger e-commerce sites. This endeavor has been quite successful: Shopify now has millions of merchants around the world, enabling almost $47 billion in merchandise volume sales in the second quarter of 2022.

Shopify merchants represented over 10% of U.S. retail e-commerce sales in 2021, but the company could take more share. Shopify is known for innovation and continuously offering new features and products to help its merchants thrive. This could transform Shopify into a gold-standard platform and help it take market share. 

One of Shopify's latest innovations is the Shopify Fulfillment Network (SFN), which allows merchants to offload shipping and fulfillment duties to Shopify. This will be expensive to build, but it could add value. One of the advantages bigger e-commerce players have over small businesses is fast delivery times, so the fact that Shopify can achieve two-day delivery for the majority of orders could be a huge incentive to use Shopify's platform.

Shopify is a leader in the small business space and is attacking a large market. Its high switching costs also make its platform sticky. The company trades at 9.3 times sales -- a historically low valuation since it came public in 2015. While that's higher than other e-commerce stocks like Etsy and BigCommerce Holdings Shopify's competitive advantages might be worth a premium.

Given this historically reasonable price, investors might want to invest in this top dog and hold for the long haul.