Tech Stock Performance Chart: From FAANG to MAGA?
A few months back, Financial Times editor Richard Waters coined a new term to describe what he sees as the dominant market-leading tech stocks – MSFT (Microsoft Corporation), AAPL (Apple Inc.), GOOGL (Alphabet Inc.), and AMZN (Amazon.com, Inc.). His acronym for these stocks – MAGA – is clearly a play on President Trump’s ‘Make America Great Again’ slogan, but Waters has some solid reasoning for proposing the replacement of the older FAANG (FB, AAPL, AMZN, NFLX, GOOGL) acronym with MAGA.
Nix Netflix and Facebook
He argues that Facebook and Netflix need not apply for membership in this new, more exclusive club of tech giants, for a couple of reasons. Netflix, he says, has too small a market capitalization to deserve a place in MAGA, even though its year-to-date performance has been pretty spectacular. As for Facebook, the scandal-plagued company has seen horrendous performance since July of this year, when the stock began to plummet and has now fallen by around 33% (as of Friday) from its late-July, all-time high.
The chart above shows the year-to-date performance of the four MAGA stocks, which, with the exception of GOOGL, have far outperformed the recently faltering S&P 500 this year. While Alphabet’s performance has indeed lagged of late, it’s unlikely to get kicked out of the club, as its market leadership and market capitalization cannot be ignored. Will the MAGA acronym actually stick, ultimately replacing FAANG? It’s not likely, but at the very least, the components of the new grouping can truly be considered the most dominant tech giants currently leading the market.
IMPORTANT: The information above should not be construed as investment advice and should not be considered as a solicitation to buy or sell securities. Past performance is not indicative of future results. Trading and investing in the financial markets involves substantial risk of loss, and may not be suitable for all investors.
Disclosure: At the time of this article’s publication, we have no position in any security or trade/investment mentioned, nor do we have any business relationship with any company whose stock may be mentioned.
Senior Market Analyst at The Technicals
A veteran global macro trader/analyst, Bart focuses on major market moves in currencies, commodities, fixed income, and global equity indexes. Bart stresses inter-market correlations and dynamics while keeping a close eye on risk. He has published countless market analysis pieces and has been a guest expert for a variety of major financial media. Contact Bart