FAANG 2.0: Say hello to MATANA and developments in Apple’s new frontier
What’s in a name? If you’re interested in the tech industry, perhaps the best question is: what’s in an acronym? Because it’s the acronym that spells out who the cool kids are.
You have to go back about nine years when the now well-known action group FAANG became a thing. The acronym was the label for all the rising tech companies that were about to change our lives: Facebook, Amazon, Apple, Netflix and Google.
Almost a decade later, they are considered America’s most successful tech companies. These are all household names. And they can move the markets, affecting all stock indices.
Taken collectively, they are what we can undoubtedly call a financial juggernaut, accounting for around 15% of the market.
But every decade or so everything changes.
Enter MATANA. Think of it as FAANG 2.0.
MATANA, according to Constellation Research senior analyst Ray Wang, better represents the new world order in tech stocks. It snatched Meta – or the old Facebook – and Netflix from the top tier of heavy hitters. And in their place raised Microsoft, Tesla and Nvidia.
Here are his arguments for this revamp of the tech world’s elite class and why the new acronym could have greater influence for the decade to come.
Those who have been abandoned:
Meta (NASDAQ:) (Facebook): Meta needs to define its plan, Wang said in an interview with Yahoo Finance.
“Facebook needs to do more than ads. Again, they’re having a blast. So, is it going to be the glasses? Is it going to be the metaverse? We’re not into it. not there yet and that’s really kind of challenging.
Netflix (NASDAQ:): The biggest question facing the streaming service, according to Wang: how many subscribers can it get?
And that’s the fundamental problem with its one-turn business model. Growth could be limited if tied solely to its subscription model.
“Product placement should be where it is, as well as the ability to license (intellectual property). Look at how Disney makes its money.
Those who have been elevated to the new group of acronyms:
Microsoft (NASDAQ:): According to Wang, the company has found a way to straddle key segments – what it offers to businesses and consumers.
“They are well positioned for the metaverse. They are well positioned for the cloud and, of course, they have their gaming business.”
NVIDIA (NASDAQ:): Its growth potential lies in the ever-increasing need for microchips, but also in how it can play an important role in emerging areas that could very well define the future.
Said Wang: “Nvidia is much more than the chips we look at and more than the data center or the games. They sit on the border between (artificial intelligence), the metaverse, the future of computing and how they do their partnerships. They are set up in a way that is going to be dominant for a while.
Tesla (NASDAQ:): The promotion in the acronym could settle a long-standing debate, confirming that Tesla isn’t just an automotive company.
But it’s an automotive company, and in the less than 20 years since its inception in 2003, it has turned the automotive industry upside down.
In 2021, Tesla was ranked as the most valuable automotive brand in the world. That same year, it was considered the fastest growing brand on the planet. Today, its Model 3 is the best-selling electric vehicle in the world, surpassing the milestone of one million cars sold in June 2021.
The world changes. It’s a fast moving place where we can no longer ignore acronyms. There is no need for LOL, IMHO. We just need to follow up ASAP.
Apple and the companies in its orbit
In keeping with the technology theme, a big event that caught the attention of many eyes last week was Apple’s (NASDAQ:) September 7 unveiling of its new products. The introduction of the latest line of iPhones, Apple Watches and Air Pods always has an impact on the company’s stock.
Apple stock rose about 0.9% on news of the event and ended the day last Wednesday up 0.5%. It closed the week on Friday at $157.37, up 1.88% on the day and down 0.43% over the past 12 months.
The company is expected to hold another product launch event next month, where it is expected to showcase its latest iPads and computers, which could once again trigger a move in the stock price.
But one thing the latest Apple event sparked was a backlash for a much lesser-known company – Globalstar Inc (NYSE:). The Louisiana-based satellite company, it has been reported, has partnered with Apple to provide iPhone 14 Pro users with emergency services via direct satellite communications.
The iPhone 14 Pro is equipped with an antenna that will give users the ability to connect to satellite frequencies to use a text service to communicate their location in case of emergency in areas without cellular service.
The announcement caused Globalstar shares to soar last Wednesday, hitting an overnight high of $2.28. However, it quickly recovered from that high, bottoming the next day at $1.66. It closed the week Friday at $1.77.
The initial roller coaster effect was based purely on a knee-jerk reaction to Apple’s announcement. The inability of the stock to embark on a sustainable upward movement, however, is more a reflection of reality.
Apple’s plans for the satellite service came with a plan to spend $450 million to support the feature, with Reuters reporting that a “majority” of that money is funneled to Globalstar. This – at first glance – seemed like a big deal, given that Globalstar recorded revenues of less than a third of that amount last year. But the reality is that Globalstar will need to invest heavily in additional satellites to fulfill its Apple service support contract, according to reports.
All to say, it will be worth watching how it plays out. The new frontier is full of opportunities, and having Apple on your side is a great way to chart a course or boldly go where no smartphone has gone before.
And this week’s top winners and losers
Again, for anyone keeping score, here are last week’s top winners:
On the S&P 500
Regeneron Pharmaceuticals (NASDAQ:): +24.78%
SolarEdge Technologies (NASDAQ:): +16.97%
Albemarle Corp (NYSE:): +15.57%
Royal Caribbean Cruises (NYSE:) 15.24%
Freeport-McMoran Copper & Gold Inc (NYSE:). : +13.75%
Amyris (NASDAQ:): +37.73%
Cassava Science (NASDAQ:): 32.90%
Pingtan Marine Enterprise (NASDAQ:): +26.08%
Pacific Biosciences (NASDAQ:): +25.75%
Riot Blockchain (NASDAQ:): +24.58%
And the biggest losers:
On the S&P 500
Occidental Petroleum Corp (NYSE:): -4.58%
McCormick & Company Incorporated (NYSE:): -3.80%
Church & Dwight Company (NYSE:): -3: 11%
CF Industries Holdings (NYSE:): -2.94%
Williams Companies (NYSE:): -2.79%
On the NASDAQ composite
More Therapeutics (NASDAQ:): -18.60%
Newegg Commerce Inc (NASDAQ:): -16.78%
Burcon NutraScience Corporation (NASDAQ:): -15.38%
Cadiz Inc. (NASDAQ:): -14.36%
Mannatech Incorporated (NASDAQ:): -14.18%