Are the 'MANGOS' stocks already turning soft amid cooling AI optimism?

By Rob Copeland

 

In the 1950s, the Italian industrialist Enrico Mattei was credited with coining what might have been the first stock market catchphrase wh-en he described the energy giants of that era, including Standard Oil and Texaco, as the “Seven Sisters.”

 

For better or worse, he unlea-shed stockbrokers and creatively frustrated Wall Street analysts to devise their own nicknames for companies in vogue. There were “FAANG” stocks of the social med-ia age, including Facebook, Amaz-on and Apple; and more recently the “Magnificent Seven” — Nvidia, Apple, Microsoft, Alphabet, Amazon, Meta and Tesla. Now, a fruit is dangling into the lexicon.

 

 

“MANGOS” is shorthand for a six-company cluster said to be at the centre of the artificial intelligence (AI) wave: Meta, Anthropic, Nvidia, Google, OpenAI and SpaceX. Investors hope this new cohort will grow exponentially and drive the stock market higher.

 

The group is on everyone’s lips, cited all over business news and on social media. That’s partly because SpaceX made history last month with the largest initial public offering (IPO), defying sceptics to trade above $2 trillion.  

 

Over the past month, more than a dozen mutual funds have been formed to bet on or against the MANGOS. Never mind that two of the six companies, Anthropic and OpenAI, aren’t even publicly traded yet. (The funds will use options and other instruments to roughly track the performance of those private companies.)

 

It’s a bit unclear who first came up with the term. A Bank of America research analyst, Vivek Arya, has used it occasionally over the past two years, but to describe a different set of chip stocks, he confirmed through a representative. (Only the N for Nvidia is the same.)

 

The current iteration of the acronym was popularised more recently by a software engineer’s June 8 post on X. It was shared widely by venture capitalists and tech investors.

 

But are these stocks already proving to have a short shelf life? Since that post, the AI hype mach-ine has hit the skids. Amid worries of overinvestment in data centres, mounting debt and expensive co-mputer processing, as well as general concern that competition will drive down the price of AI products, shares of Meta, Nvidia and Alphabet were all down last month. SpaceX has fallen from its highs, and OpenAI is leaning toward postponing its IPO until next year.

 

For the MANGOS to stay firm, the companies will need to demonstrate staying power. And there’s no guarantee that any of them, let alone all, will stick around and thrive, no matter what happens with AI. “The data is clear,” said Derek Horstmeyer, a professor of finance at George Mason University. “Once something is a coined term, it’s already run its course.”

 

Just look at Mr. Mattei’s phrase. Though the oil market is bigger than ever, only one of his “Seven Sisters,” Royal Gulf Shell, still operates as an independent company with part of its original name.