Forget FAANG or MANGOS. Focus On "MAGNOTHS."
The new lens as geopolitics reshapes markets
FAANG is yesterday’s paradigm. MANGOS misses the mark by a long shot. Instead, the new basket to follow is what I call “MAGNOTHS” (Microsoft, Anthropic, Google, Nvidia, OpenAI, TSMC, Huawei, and SpaceX).
Yes, more than one of these companies is not public. And that is the point.
Investors are looking at the global economy (and opportunities) through an old lens. The next phase of the global tech/AI buildout is increasingly state-controlled and highly geopolitical.
To truly seize on technology, investors must heed a new reality: companies like Huawei are at the core of the global economy. They are fully private, and their deals threaten to disrupt portfolios. In markets across the globe, Huawei is not just offering a product. It is offering an end-to-end Chinese tech stack, from hardware to software, edging out American firms like Nvidia.
Equally important: firms like TSMC are the backbone of firms like Nvidia, and therefore, the AI buildouts of OpenAI and others. And, TSMC is in the eye of the storm as America’s security commitments to Taiwan waver, potentially giving China carte blanche over the island. Investors must now bet on a firm that could be at the frontlines of war in the blink of an eye. Suddenly, the world’s most critical technology company is also the world’s most vulnerable, challenging the old tenet: nobody got fired for buying IBM. But what about buying TSMC?
Adding SpaceX is not about a potential $1.8 trillion IPO. It is about where the geopolitical arena is shifting.
Yesterday, it was about 5G and TikTok. Soon, it is going to be about space.
In a few short years, the new backbone of the global economy will no longer be underwater internet cables ferrying data, but the ever-growing constellations of satellites from competing governments (i.e., US, China, EU) powering nations from the top down (no pun intended).
Firms like SpaceX are not following in the footsteps of the old tech vanguards like Amazon or Netflix. SpaceX is quite literally a geopolitical stakeholder from the get-go, on the same level as nation-states. Buying SpaceX means holding a company that is entering and exiting flashpoints at its own discretion.
Then there is a separate issue with the old paradigms.
FAANG and MANGOS are both completely US-centric.
Yet, in today’s global climate, America is not the only technology champion. China is also at the head of the pack. In fact, in some areas, China is beating the US, ironically, within America itself.
A growing number of US firms are turning to Chinese LLMs over cost (American models are more expensive). Tokenomics is driving the competitive edge of Chinese AI companies. And, now, it is literally building China’s AI power.
For now, it is MAGNOTHS with the inclusion of China. But, as sovereign ideas drive tech funding, R&D, and ultimately deployment, they will give rise to new sovereign tech stacks, amending or expanding MAGNOTHS.
Surrounding all this: the success of MAGNOTHS, and the broader tech and AI world will not be defined or influenced by investors and market rallies like in the past. The very metrics that investors look at businesses through are in flux because of something I have been warning about for a few years now: governments cannot let their tech firms collapse in the current geopolitical landscape.
What Wall Street views as a flop, Main Street may view as critical. The new metrics go beyond how innovative a business is, growth in customer base, or burn rate.
It is also about how much “support” a business has from the state or how “integrated” a business is with the geopolitics of a nation. Look at Intel. Today, the company is a sure bet, not because of any product it has launched, but because the US government is backing the company in a push to rebuild American chip sovereignty (and manage China).
Most investors are looking at acronyms like FAANG, MANGOS, or MAGNOTHS wrong.
These are no longer pure investment baskets driven exclusively by opportunity, growth, and returns. Increasingly, geopolitics is at the center of them, reflecting the very motto of my business: Geopolitics First.
For decades, the savvy investor could spot market opportunities before others and steer clear of chaos. Today, the savvy investor is one who understands the new dance between geopolitics and markets, and how, increasingly, success in markets requires a mastery of world affairs. MAGNOTHS is the start of that.
Have questions or ideas? Let’s talk: abishur at mrgeopolitics dot com
Mr. Geopolitics is the property of Abishur Prakash/The Geopolitical Business, Inc., and is protected under Canadian Copyright Law. This includes, but is not limited to: ideas, perspectives, expressions, concepts, etc. Any use of the insights, including sharing or interpretation, partly or wholly, requires explicit written permission.