News Analysis: Goodbye FAANG, Hello MATANA
Goodbye FAANG, Hello MATANA
The FAANG stocks (i.e. Facebook, Apple, Amazon, Netflix, and Google) have had a great run as the large cap digital giant leaders. However, with Facebook and Netflix facing massive declines in year over year subscriber growth, their valuations have taken a hit along with the macro conditions of rising interest rates and global instability.
MATANA means gift in Hebrew and the shift to quality stocks is important. Investors seek digital giants who show double digital year over year growth and increasing revenue per user (ARPU). This collection of stocks are the gifts that keep giving. Microsoft, Apple, Tesla, Alphabet, Nvidia, and Amazon (MATANA) are the large cap shocks who have exhibited this consistency in year over year financial performance and market domination.
The Bottom Line: Flight To Quality Digital Giants Is Real
Not all tech stocks are created the same. Rising interest rates, a tightening Fed, Russia/Ukraine, and global regulatory onslaughts on tech giants provide massive headwinds on tech. However, the digital giants will still outperform most sectors given the macro environment. This shift to quality requires an understanding of which big tech categories will survive the current big tech winter. The winners will exhibit five traits as mentioned in my latest book, Everybody Wants To Rule The World.
- Build the biggest network
- Disintermediate customer account control
- Compete on data supremacy
- Dominate digital monetization
- Invest with a long term mindset
What's your view of the digital giants? Have you gone through your cyclical rotation from growth to value? Do you regret it? Ready to wait out for the dip or are you selling the rip?
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