To refer to certain sets of technology stocks that lead the stock market, analysts and investors often use terms like FANG, FAANG, MAANG, MATANA, and more. Investing in these stock groups can have multiple benefits, such as diversification, compensating for any losses that one of the companies may experience, as well as exposure to growing sectors. Many of these companies focus on rapidly growing sectors, such as artificial intelligence (IA), which has become the technological trend of 2023 following the launch of OpenAI’s ChatGPT.
Furthermore, by hosting the most popular technology companies, these groups have great liquidity, making it very easy to buy or sell their stocks, and providing greater flexibility for investors to invest in other companies. And obviously, the companies included in these groups have historical success in markets.
For example, FANG is composed of four renowned technology companies: Facebook Inc – its name was changed to META Platforms Inc (NYSE: META), Amazon.com Inc (NASDAQ: AMZN), Netflix Inc (NASDAQ: NFLX), and Google LLC (NASDAQ: GOOGL). Notably, FAANG is an extension of the FANG group, it includes Apple Inc (NASDAQ: AAPL), the producer of MacBooks and iPhones, as the fifth renowned company.
The MAANG group is an extension of FAANG, the term was coined after Facebook was transformed into Meta Platforms. As a result, the “F” letter was replaced with “M”.
Further in this guide, we will focus on the MATANA group that is expected to make headlines in the coming years, according to analysts.
MATANA Group Defined
The MATANA group is composed of six high-level technology companies: Microsoft Corporation (NASDAQ: MSFT), Apple Inc, Tesla Inc (NASDAQ: TSLA), Alphabet Inc (NASDAQ: GOOGL), Nvidia Corp (NASDAQ: NVDA), and Amazon.com Inc.
These giants are regarded as a powerful tech group driving many of the biggest innovations in the world. In terms of market dominance, the stocks of the MATANA group make up almost 50% of the Nasdaq 100 Index, which tracks the performance of the 100 largest non-financial companies listed on the Nasdaq Stock Exchange.
Therefore, these companies have a significant influence on the tech market’s returns. This has led the MATANA group to replace the FAANG group as a reference in the tech industry.
Moreover, each of the companies comprising the MATANA group has successfully dominated its respective sector. Below are some milestones these tech giants achieved in 2023.
- Microsoft: during 2023, the company made some significant acquisitions in the field of artificial intelligence and application development technology. They have acquired a stake of $10 billion in OpenAI, the company behind the ChatGPT platform. Thanks to this acquisition, Microsoft can offer OpenAI’s GPT-4 chatbot to business customers through Azure which is assisting them in boosting productivity and improving customer service.
- Apple: in June 2023, Apple unveiled the augmented reality headphones called “Apple Vision Pro”. This marked the company’s first significant release in nearly a decade, resulting in a surge in its stock value. Despite the headphones being priced at approximately $3,000, they have received a positive response from the community. These headphones offer the ability to seamlessly switch between virtual and augmented reality experiences.
- Tesla: in June 2023, Tesla announced the construction of the foundational model for autonomous robots and the implementation of multimodal neural networks in their customers’ vehicles. These networks utilize different sources of information, such as camera video, maps, navigation, inertial measurement unit (IMU), and GPS. Additionally, it was reported that their supercomputing platform, Dojo, would go into production in July 2023. Tesla’s objective is to position its computing capacity among the top five in the world by January 2024 and reach 100 exaflops by October 2024.
- Alphabet: the company launched its new language model (LLM) “PaLM 2”, which introduces improvements in handling multiple languages. It has been trained in over 100 languages, as well as in research, mathematics, and programming languages. Google has implemented this model in 25 of its services, including Google Docs, Sheets, and Gmail.
- Nvidia: the company has become a leading manufacturer of AI hardware components, controlling 95% of the market for processors used to train machine learning models. In June 2023, the company announced its work on the development of new processors called “Grace”, which are specifically designed for servers and can be highly useful in the field of AI.
- Amazon: in June, Amazon Web Services (AWS) announce that it would invest $100 million in the creation of a generative artificial intelligence innovation center. The team would collaborate with clients to develop customized solutions that harness the potential of this technology.
The performance of the MATANA Group in a three-year period, from June 2020 to June 2023, has been remarkable. Nvidia led the way with an impressive 343% increase in its stock price, followed by Tesla with a 276% increase. Amazon has been the only company with negative figures over these 3 years, reflecting a -5% performance. However, it has shown slight signs of recovery from mid-2022 until June 29, 2023, achieving a gain of 12%.
It is worth mentioning that the excessive surge in Nvidia’s stock price has been driven by its leadership in the artificial intelligence industry. This has led the company to reach the milestone of one trillion dollars in market capitalization in early June 2023, becoming the seventh US company to achieve this feat, which is quite impressive for the renowned gaming GPU company.
Which Company Is Best to Invest In?
According to a report from Nasdaq, the best company in the MATANA group for long-term investment is Alphabet. In February 2023, Wall Street maintained a unanimous stance on buying Alphabet shares, with 32 analyst firms promoting its “purchase”.
The analysts based their recommendations on Google’s market dominance in search (76% dominance compared to other search engines) since Google is owned by Alphabet. This could continue to strongly drive the company’s long-term growth through the advertising it offers.
Additionally, they pointed out that Alphabet could be one of the companies with double-digit returns in the coming years, which is highly appealing to long-term investors.
It’s important to note that within the first six months of 2023, Nvidia’s shares have experienced a bullish rally that has surprised many, as nobody expected the chip designer to achieve such success in its AI venture, resulting in a modest gain of 187% as of July 2023.
Therefore, although Alphabet is considered the best investment option within the MATANA group, it would be wise to pay attention to Nvidia and keep track of its investments before becoming infatuated with a single stock. Who knows if their entry into AI might end up generating better returns than those offered by Alphabet?
MATANA Compared to Other Groups
Ray Wang, Founder, Chairman and Principal Analyst of Silicon Valley-based Constellation Research Inc, said the MATANA group should be considered the new name for Big Tech stocks instead of FAANG. Wang believes that MATANA companies significantly outperform FAANG by excluding Meta and Netflix and including tech giants Microsoft, Tesla, and Nvidia.
According to Wang, Meta needs a better growth plan beyond advertisements and its foray into the metaverse, while Netflix raises doubts about its growth potential in terms of adding more subscribers.
Furthermore, the analyst highlighted that Microsoft is one of the technology companies best positioned to excel in the metaverse, cloud computing, and the gaming industry, which generates trillions of dollars annually.
Compared to other prominent groups like FANG, FAANG, or MAMAA, MATANA has a lot to offer to investors. However, it remains to be seen whether the AI boom will become the future of the technology industry or if it will only be a passing trend because many of these companies are increasing their profits thanks to AI.