It’s time to rethink who’s at the top of the Big Tech food-chain, Constellation Research Principal Analyst & Founder Ray Wang told Yahoo Finance Live (video above).
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.
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.
“Facebook has got to do something besides ads,” he told Yahoo Finance. “Once again, they’re taking a beating for it. So, is it going to be the glasses? Is it going to be the metaverse? We’re not there yet and that’s really kind of what the challenge is.”
For Netflix, it’s a question of growth, and what is and isn’t on the table. And because the company’s operating on a subscription model, Wang has questions about how much further they could go.
“The reason they’re out is because, how many more subscribers? How many more subscriptions are you going to handle?” he said. “Product placement should be where they are, plus the ability to do IP licensing. Look at how Disney makes its money.”
Wang stressed that Microsoft, which is often viewed as one of tech’s leading legacy names, should be included in the group of tech’s most elite leaders (and sometimes has been with the bulky FAAMNG acronym).
“Microsoft has more than just business-to-business and consumer – they’ve been able to manage both,” he said. “They’re positioned well for the metaverse. They’re positioned well for the cloud and, of course, they’ve got their gaming business.”
Rounding out the new grouping would be Tesla — a well-known success story at this point — and Nvidia.
“Nvidia is a lot more than just the chips that we look at and more than the data center or gaming,” Wang said. “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.”
Allie Garfinkle is a Senior Tech Reporter at Yahoo Finance. Follow her on Twitter at @agarfinks.
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