MANGOS Overtakes Magnificent Seven as AI Stocks Shine
In the 1950s, the Italian industrialist Enrico Mattei is recognised for coining what could be considered the inaugural stock market catchphrase when he referred to the energy behemoths of that time, such as Standard Oil and Texaco, as the “Seven Sisters.” For better or worse, he unleashed stockbrokers and creatively frustrated analysts to devise their own nicknames for companies in vogue. There were “FAANG” stocks of the social media age, including Facebook, Amazon and Apple; and more recently the “Magnificent Seven” — Nvidia, Apple, Microsoft, Alphabet, Amazon, Meta and Tesla. Currently, a fruit is emerging within the lexicon. “MANGOS” refers to a cluster of six companies identified as pivotal to the artificial intelligence movement: Meta, Anthropic, Nvidia, Google, OpenAI, and SpaceX. Investors anticipate that this new cohort will experience significant growth, thereby propelling the stock market upward.
The group is widely discussed, referenced throughout business news and across social media platforms. That’s partly due to SpaceX’s historic achievement last month with the largest initial public offering, surpassing sceptics to trade above $2 trillion. Over the past month, more than a dozen mutual funds have been established to speculate on or against the MANGOS. It is worth noting that two of the six companies, Anthropic and OpenAI, are not yet publicly traded. The funds will employ options and various instruments to approximate the performance of those private companies. It remains somewhat ambiguous as to who originally coined the term. Vivek Arya, has utilised it intermittently over the past two years; however, he has clarified through a representative that it pertains to a distinct category of chip stocks. (Only the N for Nvidia remains unchanged.)
The current iteration of the acronym gained prominence following a software engineer’s post on June 8 on X. It garnered extensive attention from venture capitalists and technology investors. But are these stocks already demonstrating a limited duration of viability? Since that post, the enthusiasm surrounding AI has significantly diminished. Amid concerns regarding excessive investment in data centres, increasing debt levels, and high costs associated with computer processing, alongside a general apprehension that competition may lead to a decline in AI product prices, the shares of Meta, Nvidia, and Alphabet experienced a downturn last month. SpaceX has experienced a decline from its peak performance, while OpenAI appears to be favouring a delay in its initial public offering until the following year.
For the MANGOS to maintain their strength, the companies must exhibit resilience. There is no assurance that any of them, much less all, will remain and prosper, irrespective of the developments in AI. “The data is clear,” stated Derek Horstmeyer, a finance professor at George Mason University. “Once something is a coined term, it’s already run its course.” Consider Mr. Mattei’s statement. Though the oil market has expanded significantly, only one of the “Seven Sisters,” Royal Gulf Shell, continues to function as an independent entity while retaining part of its original name.
