Cramer: Netflix Proves It Belongs In The 'FANG' Group

Jim Cramer coined the term "FANG" to describe not only four of the hottest tech and internet stocks, but companies that have revolutionized the way we use the internet.

Cramer explained during Tuesday's "Squawk on the Street" segment that Facebook Inc FB made it possible for people to "tell personal narratives" and share content with the world. Amazon.com, Inc. AMZN made buying online very easy and convenient, and Google GOOG GOOGL mastered short-form video.

And now Netflix, Inc. NFLX proved in its earnings report on Monday it's an expert in producing content that is not only accessed on the internet but equally loved in South Korea as it is in Brazil or Europe. In fact, not only does Netflix know what kind of content users love, it will continue pumping out new content for the foreseeable future.

"You know you don't to get to be FANG for nothing," Cramer emphasized.

What The Bears Are Saying

Many Netflix bears will be quick to point out that Netflix is the lone FANG member with a negative cash flow, but Cramer isn't convinced, at least based on the company's reasonable debt to equity ratio.

Meanwhile, Netflix's own management team suggested it isn't concerned with its negative cash flow and its main focus is on adding and retaining members -- something it's an expert at.

"They are doing production that makes you sign up, and once you are hooked its over," Cramer said. "This is an intellectual opioid."

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