A tech analyst is pushing to shake up the prominence of the market’s biggest tech companies.
Key details
A research analyst is arguing that there needs to be a shakeup in terms of who the market regards as the most notable tech companies.
Constellation Research Principal Analyst Ray Wang argues that Facebook and Netflix should be dropped.
FAANG has long been an acronym for the five most prominent tech companies that are totally dominant in their markets—Facebook (now Meta), Apple, Amazon, Netflix, and Google (now Alphabet).
Wang wants to replace it with his own MATANA.
“Wang argued that MATANA—Microsoft (MSFT), Apple (AAPL), Tesla (TSLA), Alphabet
(GOOG, GOOGL), Nvidia (NVDA), and Amazon (AMZN)—is an upgrade to FAANG by dropping Meta (META) and Netflix (NFLX) while adding Microsoft, Tesla, and Nvidia,” says Yahoo Finance.
Why it’s important
Wang’s suggestion comes with the changing nature of the market as major companies are diversifying their business models and income streams. Wang sees Facebook and Netflix as struggling to fit into the current market as they feel pressure to implement new features and revenue streams but haven’t taken the plunge yet.
“They’re one-trick ponies, and in the business world if you’re not doing other business models and digital monetization it’s not going to survive… Take something like Apple. What have they done? They’ve got ads, search, goods, services, memberships, and subscriptions down the line. Amazon is doing the same thing as well and they’re doing very well,” says Wang.
Apple, Amazon, and Tesla have outperformed the rest of the tech sector despite 52-week lows, says Wang.
Backing up a bit
The term “FAANG” was popularized by CNBC host Jim Cramer in 2013, and updated in 2017 to add Apple. Wang argues that it needs to be updated again.
“In 2013, when Jim Cramer of CNBC’s Mad Money coined the term FAANG, many of those companies were thought of as upstarts who’d taken their respective markets by storm. This was especially true of Meta—then Facebook—and Netflix. But now, Wang said, both should be re-assessed. Meta, in particular, needs a new plan,” says Yahoo Finance.
What’s not being said
Nvidia’s inclusion comes following a recent dip in the market for the chip manufacturer. As we previously reported, Nvidia was forced to lower its profit projections for the second quarter of 2022 following an overall decline in sales for the entire chip market. Wang’s inclusion would suggest he sees a strong future as Nvidia’s sales diversify and return.
“Nvidia is a lot more than just the chips that we look at and more than the data center or gaming. They’re sitting at the edge between AI, the metaverse, the future of computing, and the way they do their partnerships, they’re set up in a way that’s going to be dominant for quite some time,” says Wang.
