MAGMA: Microsoft, Apple, Google, Meta and Amazon

Who needs Netflix? MAGMA is red hot and incinerates everything in its path.

From Jason Fernando's  [outdated] "FAANG Stocks" posted last month on Investopedia:

The term was coined by Jim Cramer, the television host of CNBC's Mad Money, in 2013, who praised these companies for being “totally dominant in their markets”. Originally, the term "FANG" was used, with Apple—the second “A” in the acronym—added in 2017.

    • FAANG is an acronym referring to the stocks of the five most popular and best-performing American technology companies: Meta (formerly known as Facebook), Amazon, Apple, Netflix, and Alphabet (formerly known as Google).
    • In addition to being widely known among consumers, the five FAANG stocks are among the largest companies in the world, with a combined market capitalization of nearly $7.1 trillion as of Aug. 19, 2021.
    • Some have raised concerns that the FAANG stocks may be in the midst of a bubble, whereas others argue that their growth is justified by the stellar financial and operational performance they have shown in recent years.

My take: It's simple. By market cap, the five MAGMA companies are the world's largest, with a combined market value of nearly $8.9 trillion.

UPDATE: Cramer is going with MAMAA, which also drops Netflix and has the virtue of using the new corporate ID for both Google (Alphabet, which nobody ever liked) and Facebook (Meta, which is just stupid.)

Cue the video:

18 Comments

  1. David Emery said:
    P/E
    FB: 23.1
    AMZN: 65.97
    GOOG (class C): 28.56
    AAPL: 26.65
    MSFT: 37.09

    1
    October 30, 2021
  2. Bart Yee said:
    If anything, by market cap, Netflix at $305B and no slouch in share returns, should have been replaced by Nvidia at $637B, Tesla at now over $1T, or even TSMC at $589B.

    However, the original FAANG stocks all represented consumer tech in newfound hot consumer growth areas – FB (social media), AMZN (online goods purchasing), Apple (iPhone, hardware, services), NFLX (streaming and now content), and Google (search, advertising, data mining, Android).

    MIcrosoft was left out at the time, and seemingly now, because it catered much more to corporate interests (Cloud, Office, Windows/PC OEM’s) rather than consumer (despite noise to the contrary gaming consoles and computer hardware themselves don’t contribute as much as The Intelligent Cloud does and even Microsoft XBox consoles and Surface products are subject to the same component supply issues – but when you don’t sell that many – 8 million units for this recent series and also supply constrained, generating about 10% of Sony PS5 revenue, supply isn’t as critical.)

    But certainly MSFT should be considered as major tech player worthy of investment. Nvidia and TSMC are “hardware” companies so we’re looked at until the last 3 years as simply widget makers so were unsexy except for their recent returns boosted by the chip shortages and for TSMC, reliance on Apple.

    2
    October 30, 2021
  3. Bart Yee said:
    I proposed to PED if we add MSFT to FAANG, now MAANG, we could consider the following acronyms:

    MMAANG – ick, advantage of one syllable but easy to slide over to from FAANG
    GAMMAN – too much like a newspaper company, said as two separate syllables and becomes misogynistic
    MAGMAN – kinda works but sounds a bit superhero-ish
    MAGNAM – *my #1 choice, as in magnum, also has a Korean bent as in Gangnam style
    MANMAG – too male gender first
    MMANGA – *#2 choice works but gives prominence to Meta like FAANG did, does have the Japanese anime ring to it though so could catch on with millennial and Gen-investors
    MMANAG as in mma-nag (soft g sound) like Nicky Minaj?, too complicated?
    MMAGAN – *#3 choice, could work and sounds like a name.
    NGAMMA or GAMMA-N – for Greek letter lovers
    GANAMM
    MANGMA

    0
    October 30, 2021
    • Alan Birnbaum said:
      Scrabble anyone ? /s

      0
      October 30, 2021
  4. Apple spent ~$22 billion USD on R&D alone in the past fiscal year. Few firms are even worth that sum. ~$5.8 billion spent on R&D in the last quarter. When CEO Cook says they have really interesting new products in development he means major new products. The chips in the newest Macs no doubt sucked up a serious chunk of R&D. The $24 billion + likely to be invested in FY22 is certain to result in more than just wonderful Apple hearing aids. The ramp up in R&D is also important to squelch key Senators critical of share buybacks & acquisitions over R&D. BTW: Entirely new conventional car, truck & bus model development, by existing manufacturers, requires $ billions in R&D. EVs less so with component
    standardization.

    3
    October 30, 2021
    • Gregg Thurman said:
      The $24 billion + likely to be invested in FY22 is certain to result in more than just wonderful Apple hearing aids.

      Like 5G desktops, 5G AirPort Extreme/Express with connectivity to Satellite 5G, and apps demanding M1Max power?

      0
      October 30, 2021
  5. Daniel Epstein said:
    I thought Jim Cramer (who coined the Faang acronym) is trying to switch to Mamaa. Not sure how he was dealing with Netflix. Msft, Apple, Meta, Alphabet, Amazon in no particular order for the A’s. Maybe it should be Alphabetical.

    1
    October 30, 2021
    • David Emery said:
      “Mamaa, just killed a man. Put a gun against his head, pulled the trigger, now he’s dead …. ” 🙂

      1
      October 30, 2021
    • Bart Yee said:
      @Daniel
      Cramer was probably thinking:
      “Yo MAAMA!” and a high five!
      ヘ( ^o^)ノ\(^_^ )

      0
      October 30, 2021
  6. Kirk Burgess said:
    Actually Tesla is a lot larger market cap wise than Facebook/Meta is now: $1.1 Trillion for Tesla vs $900 Billion for FB/M

    3
    October 30, 2021
  7. Steven Philips said:
    I personally think it’s a mistake to lump all these together for the sake of any acronyms. I think it hurts Apple/AAPL and generally does a disservice to many. Though I really don’t care about the others. Apple isn’t (very) related but it gets seen “as if”.

    1
    October 30, 2021

Leave a Reply