Cramer’s MAMAA Leaves Netflix for Microsoft

Jim Cramer honked his horn and Netflix was kicked to the curb. Such is the power of the stock promoter in the digital age. Cramer, who is credited with coming up with the FAANG acronym that tech investors have used as a roadmap for the past decade, is now pimping MAMAA. It stands for Meta, Alphabet, Microsoft, Apple, and Amazon.

Jim’s MAMAA doesn’t like Netflix (NFLX) because their market cap is only $300 billion. He forgot to mention that they’re outperforming three of his MAMAA’s five stocks this year. Netflix is up 27.84% YTD. Here’s what the year-to-date performance for the new group looks like:

  • Meta (as Facebook): (MVRS): Up 24.88%
  • Alphabet: (GOOG): Up 72.06%
  • Microsoft: (MSFT): Up 54.55%
  • Apple: (AAPL): Up 16.65%
  • Amazon: (AMZN): Up 9.11%

Sadly, many of the blinded followers of Mad Money dumped Netflix after the announcement on October 29th. The stock is down 1.21% this week. Did Cramer know that would happen? Of course, he did. A jilted partner always takes the hit. Personally, I think the streaming giant will do just fine on their own. Consider that my “buy now” recommendation.

Small Cap Tech Stocks to Watch in Q4

I’m not surprised that Google and Microsoft are the big earners in 2021. Meta, which will always be Facebook to me, just isn’t in the same class, no matter what Cramer says. Apple and Amazon are two of my mainstays, so I have no issue with them. My concern is that the hype over MAMAA might slow down small cap investing. That would be a mistake.

We’re going through a technology shift. Innovation today is going to lead to big returns over the next five to ten years. Capitalizing on that trend requires taking some risk. That’s what small cap investing is all about. Pick the right company and you might get rich. Bet wrong and you’ll see losses. I buy the Apples and Amazons for stability. Small caps are where I make my money.

Varonis Systems (VRNS) is at the top of my list today. This small-cap company has been niche marketing to users looking to protect unstructured data not stored in a database. That data is a prime target for hackers and often contains details on business research and development. Innovators need data security. Varonis is up 51.31% over the past twelve months.

Another tech firm is this category is Teradata Corporation (TDC). Bank of America has a buy rating on the cloud solutions company with a price target of $67. They’re at $56.89 right now and growing slowly, so it might take a while to get there. I like them as a Q4 investment because they always seem to spike at the beginning of the year. Check the chart.

My New Watchlist: Metaverse Virtual Education Platforms

Gamer platforms and online stores aren’t the only entities that will benefit from a fully functioning metaverse. Think about the potential for educational platforms. Parents have been pleading for a more effective way to educate their children in a post-pandemic world. Virtual classes in the metaverse are a solution that could become commonplace by 2030.

The first addition to my watchlist in this category is Coursera (COUR). They’re down for the year, but up 5.22% this month after a strong Q3 earnings report. Zacks has them rated as a #2 (buy recommendation) on their latest report. I believe they’ll be a leader in the virtual education space. Tune in next week to read more about why I feel that way.

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About the Author

Cramer’s MAMAA Leaves Netflix for Microsoft

Kevin Flynn

Kevin D. Flynn is InvestorsPrism's Editor-Financial Markets. A former financial professional and founder of AdvisorScale Financial Writing, Kevin lives in Leominster, Massachusetts with his wife Evelyn, two cats, and nine wonderful grandchildren.