Coinspeaker
What Are MAMAA Stocks?
In the ever-evolving world of technology and finance, certain companies have become industry leaders, shaping the landscape of the global market. Over the years, different acronyms have been used to group these companies together, reflecting their dominance and influence. One such acronym that has gained traction recently is MAMAA, which represents a new generation of tech giants.
Big-tech groups have changed a lot during the 2010s and 2020s, and the acronyms for the biggest tech stocks have been adjusted too. FANG became FAANG, then MAMAA. Nonetheless, there’s an intriguing story behind the evolution of this particular group of tech giants.
In the guide below, we will explore the origin of MAMAA, discuss the companies included, analyze their performance, and provide insights into whether investing in MAMAA stocks is a worthwhile endeavor.
Meet MAMAA: What Is Behind the Acronym?
MAMAA group includes stocks of Microsoft Corporation (NASDAQ: MSFT), Apple Inc (NASDAQ: AAPL), Meta Platforms Inc (NYSE: META) – formerly Facebook Inc, Amazon.com Inc (NASDAQ: AMZN), and Alphabet Inc (NASDAQ: GOOGL). These companies have become household names, revolutionizing the tech industry and becoming integral parts of our daily lives. Let’s take a closer look at each of them.
Microsoft
Founded by Bill Gates and Paul Allen in 1975, Microsoft is a global technology company known for its software products, including the Windows operating system and Office suite. It has diversified into cloud computing services with Azure and also operates the Xbox gaming platform. Microsoft’s products and services have had a profound impact on both personal computing and enterprise solutions. The company has a strong focus on providing user-friendly experiences, promoting productivity, and supporting digital transformation in organizations. It continues to innovate and adapt to the evolving technology landscape to stay at the forefront of the industry.
Apple
Founded by Steve Jobs, Steve Wozniak, and Ronald Wayne back in 1976, Apple is renowned for its consumer electronics, software, and services. Apple has gained a reputation for its sleek designs, intuitive interfaces, and robust ecosystem of apps and services.
Apparently, Appl has emerged as one of the largest smartphone manufacturers globally, it is known for its iconic iPhone series, Mac computers, iPad, and Apple Watch. The company extends its revenue streams extend beyond device sales, it has leaned its focus on higher-margin subscription services like Apple Music, Apple News+, Apple Arcade, Apple TV+, iCloud, and the App Store (where users can download applications for their Apple devices).
Meta
Mark Zuckerberg founded Facebook in 2004 as a social networking platform. In 2021, Facebook rebranded as Meta, emphasizing its focus on virtual reality (VR), augmented reality (AR), and the metaverse.
With ownership of globally renowned platforms like Facebook, Instagram, WhatsApp, and Messenger, Meta boasts two of the most engaging social media apps and two of the largest messaging apps worldwide. Its revenue model revolves around displaying targeted advertisements to users as they navigate through captivating photo and video feeds.
Amazon
In 1994, Jeff Bezos laid the foundation for what would become the global e-commerce giant known as Amazon. Initially, it was introduced as an online marketplace for books. Amazon swiftly expanded its reach, diversifying into an extensive array of products and services. Today, it stands as the titan of online retail, captivating customers worldwide with its exclusive selection and convenience.
Beyond its e-commerce dominance, Amazon has ventured into cloud computing services through its renowned platform, Amazon Web Services (AWS). AWS has revolutionized the digital landscape, empowering businesses with scalable and flexible cloud infrastructure solutions.
Alphabet
Founded by Larry Page and Sergey Brin in 1998, Google became synonymous with internet search. Alphabet is the parent company of Google and encompasses various other ventures, including YouTube, Android, and Waymo (self-driving cars). Google’s dominance in online advertising and its focus on cutting-edge technologies have solidified its position as a tech powerhouse.
From FANG and FAANG to MAMAA
Before the emergence of MAMAA, other acronyms were used to group together leading tech stocks. FANG, coined by CNBC’s host Jim Cramer in 2013, stood for Facebook Inc, Amazon.com Inc, Netflix Inc, and Google LLC. This term was expanded to FAANG to include Apple Inc within the group, acknowledging its influential role in the industry. The FAANG stocks became synonymous with growth and innovation in the technology sector.
Over time, FANG/FAANG label lost its relevance for several compelling reasons. First and foremost, the acronym itself has become outdated as it no longer accurately reflects the current state of the companies it represents. In October 2015, Google’s parent company saw a significant transformation, rebranding itself as Alphabet. Notably, the company continued to trade under its familiar ticker symbols, GOOG and GOOGL, maintaining its prominent position in the tech landscape.
Therefore, as Meta (formerly Facebook) expanded its business beyond social media and Google restructured under Alphabet, the acronym FAANG had to change in order to accurately represent the group. Thus, MAMAA was introduced to include Microsoft and reflect the evolving nature of these tech giants.
MAMAA Stocks’ Performance
The MAMAA companies have been tagged as the tech giants within the industry due to their outstanding performances and their reputable presence in the world of technology. Notably, the group had experienced an extraordinary surge, during the mid- to late 2010s, solidifying their increasing influence over the stock market. As 2014 drew to a close, the stocks commanded around 7.4% of the market capitalization within the S&P 500. Interestingly, by the conclusion of 2019, this share had nearly doubled, reaching an impressive 14.4%. Moreso, throughout this same time frame, the collective market capitalization of the FAANG stocks grew by an astonishing 178.5%, outpacing the S&P 500’s growth rate of approximately 46.5%.
The MAMAA stocks have maintained their relevance in the stock market into 2023, remaining on the top list of reputable stocks within the tech space.
As of July 2023, the prognosis for MAMAA stocks is positive. For example, Microsoft stock started 2023 at $239.82. At the beginning of July, Microsoft traded at $335.02, which means the price increased by 40% over the period of 6 months. The overall technical analysis for Microsoft stock is bullish.
Apple stock price prediction is looking bullish as well. By July 2023, Apple shares appreciated 38% in value, which made Apple one of the best-performing tech stocks. In addition, AAPL became the second major tech stock after Nvidia Corp (NASDAQ: NVDA) to hit a new all-time high since the bull run of 2021.
Meta did not have a good 2022 as the overall profit of Meta was reduced to half. The economic challenges that characterized much of 2022 were the biggest headwind for the company, since the adtech business fueling its social media platforms accounts for nearly all the company’s revenue. However, the strong point of Meta is its huge domain base. In the fourth quarter of 2022, Meta reported nearly 3 billion active users across all its social media platforms, Facebook, Instagram, and WhatsApp. Therefore, analysts are still optimistic on Meta stock.
Further, Amazon shares started recovering in 2023, after a sharp 50% decline in 2022 as a result of a significant fall in its e-commerce business and foreign currency fluctuations. In July 2023, Amazon remains the company with the world’s fifth-largest market cap of $1.05 trillion. Experts’ rating for the stock is a buy.
Finally, Alphabet generates about 80% of its revenue from advertising, and that declining business led to a slowdown in revenue growth in 2022. As a result, Alphabet stock hit a 52-week low of $83.34 in November 2022. When it comes to 2023, it is a different story. Taking advantage of the rebounding advirtising, Alphabet stock took off in May, and analysts advise to consider a long-term investment in Alphabet.
Bottom Line
MAMAA stocks remain solid choices for long-term growth. The stocks have been thriving as the companies have continued to deploy efficient business mechanisms propelling their growths into further attracting the interests of investors.
Undeniably, each MAMAA stock presents compelling reasons for investment. However, it is crucial to consider the risks and market conditions. The tech industry is highly competitive and subject to rapid changes. Also, regulatory challenges, data privacy concerns, and geopolitical factors can all impact these companies’ performances and cause them to become volatile. Additionally, valuations and stock prices may already reflect future growth expectations, potentially limiting short-term gains.
As such, investors should conduct thorough research and consider market conditions before making investment decisions concerning the stocks. Diversifying one’s portfolio beyond MAMAA stocks is advisable for risk management.