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Analyst Suggests Replacing FAANG with MATANA in Hierarchy of Stocks
In the ever-evolving tech world, the dominance of FAANG – Facebook Inc, now Meta Platforms Inc (NASDAQ: META), Apple Inc (NASDAQ: AAPL), Amazon.com Inc (NASDAQ: AMZN), Netflix Inc (NASDAQ: NFLX), and Google alongside its parent company Alphabet Inc (NASDAQ: GOOGL) – has been unquestionable. However, as the sector evolves, some experts suggest that it is necessary to rethink the hierarchy and put a new lineup at the top even before earlier proposed MANTA stocks. In a report, Constellation Research Principal Analyst and Founder, Ray Wang, recently proposed a revamped lineup known as MATANA – an acronym that presupposes excluding Meta and Netflix stocks from FAANG while adding Microsoft Corporation (NASDAQ: MSFT), Tesla Inc (NASDAQ: TSLA), and Nvidia Corp (NASDAQ: NVDA).
MATANA Stocks
CNBC’s “Mad Money” anchor Jim Cramer coined the phrase “FAANG” also known as “MAANG” to designate the tech giants Meta Platforms, Apple, Amazon, Netflix, and Google in 2013. At the time, these companies were seen as disruptive startups that had transformed their respective markets.
However, Wang now believes that it is time to re-evaluate the position of Meta and Netflix within the Big Tech ecosystem. Wang argues that both companies require a fresh perspective and, in particular, Meta needs a new plan to regain its competitive edge.
Wang argues that the growth potential of Netflix raises questions about the scalability of its subscription-based model. Notably, Netflix’s success in the media and entertainment industry is founded on its subscription-based strategy, in which customers pay a monthly fee for access to a massive library of content.
However, Wang is concerned that as the streaming scene becomes more saturated, Netflix has difficulties in maintaining subscriber growth. He, therefore, suggests that exploring alternative revenue streams, such as product placement and Intellectual Property (IP) licensing, could be crucial for Netflix’s long-term success.
In the instance of Meta, Wang claims that the company’s reliance on advertising revenue has created fundamental growth constraints. He highlighted that Meta needs to diversify its revenue streams to ensure sustainable growth and address the negative sentiment associated with its advertising-focused approach.
Wang’s Argument in Favor of Microsoft, Tesla, and Nvidia
Furthermore, Wang argues in favor of Microsoft. He established that Microsoft’s diversified portfolio and strategic positioning in critical areas such as the metaverse, cloud computing, and gaming places it among the industry’s most significant corporations.
While rounding up the grouping, Wang revealed that Tesla and Nvidia have emerged as major contenders deserving of inclusion in the elite group of technology powerhouses.
Notably, Tesla’s revolutionary advances in battery technology, autonomous driving capabilities, and network of Supercharger stations have set new industry norms. The company’s relentless pursuit of innovation has made electric vehicles increasingly accessible and desirable to a wider consumer base.
Similarly, Wang emphasizes that Nvidia’s impact extends far beyond its physical products. He reiterated that the company’s positioning as a leader at the edge of AI, the metaverse, and the future of computing places it at the forefront of transformative technologies.
Analyst Suggests Replacing FAANG with MATANA in Hierarchy of Stocks
