These Aren’t Your MAMAA’s Tech Stocks… And That’s Good
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Move over FANG… the acronym we use as a catch all for the biggest tech names in the market has gotten a bit of a makeover.
Thanks to name changes and the replacement of certain stocks, the new name on everyone’s lips is MAMAA, and no, these aren’t your mother’s tech stocks.
The stocks in this group are ones paving the way for our technological future, whether that be the metaverse or how we communicate with one another everyday. This acronym is made up of…
- Microsoft (MSFT)
- Apple (AAPL)
- Meta (META), formerly known as Facebook
- Amazon (AMZN), and
- Alphabet (GOOGL), formerly known as Google.
This is a big week not just for these stocks, but the market as a whole as they are all set to report earnings this week, with MSFT and GOOGL set to kick things off tomorrow after the market closes. The reason these stocks have been packaged together is because of their outsized weight and ability to move the overall market.
Investors will undoubtedly be on the edge of their seats as they hold their breath, patiently awaiting what the results will be. Good or bad, we should expect these earnings to set the tone for the market as we close out the rest of 2022.
As investors prepare for this continuation, and even potential increase, of market volatility, we’re again presented with some choices, namely whether we want to reduce exposure to the technology sector or add to it.
However, when looking at the projects of the future that these companies are working on, reducing your exposure to these names could be short sighted. With projects like Meta’s pursuit of conquering the metaverse, Apple’s attempt to create its first car, and Amazon investing heavily in logistics and supply chain improvements, there is a lot to look forward to.
So here lies the nexus between the short term of these companies’ performance as they develop their new technologies and long term when they begin to roll these out to the public, where their effect on their bottom line will begin to take shape.
If earnings come in worse than investors expect, it is my opinion that this will simply give investors an even better price to add these stocks to their portfolio. Conversely, if they exceed investors’ expectations, then we could see their stock prices get a decent bump, despite the continuing bear market and recession.
In my mind, these investments may seem to carry outsized risk right now as the market takes us on a rollercoaster ride, but the future still looks bright.
However, there is one way to take some risk off the table and mitigate the volatility that will undoubtedly accompany these reports, and that’s investing in the ETF that tracks the S&P 500, otherwise known as “SPY.”
Regardless of what these earnings reports show for the most recent quarter, which hasn’t been a smooth ride for most stocks, I still firmly believe in the power and influence these companies will have on the future. Thus, these are worthwhile investments for any investor. As the economy and market inevitably, eventually improve, these “MAMAA” stocks should lead the way.
Nevertheless, investors should pay close attention to the week ahead to pinpoint a good price to take advantage of the sale that has already been underway for much of 2022.
Today’s feature: MAMAA Stocks
