Replace FAANG with MATANA in stock hierarchy, suggests analyst.

The FAANG group, consisting of Facebook (now Meta Platforms), Apple, Amazon, Netflix, and Google (along with its parent company Alphabet), has been dominant in the tech industry. However, some experts suggest that it is time to rethink this hierarchy and put a new lineup at the top. Constellation Research Principal Analyst and Founder, Ray Wang, recently proposed a revamped lineup known as MATANA, which excludes Meta and Netflix stocks from FAANG while adding Microsoft, Tesla, and Nvidia.

In 2013, CNBC’s “Mad Money” anchor Jim Cramer coined the phrase “FAANG” (also known as “MAANG”) to designate the tech giants in question. 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. He 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 case 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.

Furthermore, Wang argues in favor of Microsoft, Tesla, and Nvidia. 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. 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.

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