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Big Tech’s already beloved dollars have become even more valuable coins.
My colleagues and I have written extensively about the unrealistic sales, profits, and power of America’s five tech giants – Apple, Microsoft, Google, Amazon, and Facebook. This may feel like old news. Tech’s Titanic 5 has been big and rich for a long time, and they’re even more so as people and organizations need their products during the coronavirus pandemic. Yadda, yadda, yadda. We understand.
But no, we really don’t get it. America’s tech superstars have entered an entirely different stratosphere than other wildly successful companies in tech and beyond.
Let me give you a taste of bonkers-ness:
The current stock market value of the Big Five ($9.3 trillion) is higher than the value of the next 27 according to data from S&P Global Market Intelligence.
Apple’s profit over the past three months alone ($21.7 billion) is nearly double the combined annual profit of the five largest US airlines in the pre-pandemic period of 2019.
Amazon’s stock price surge has made Jeff Bezos so rich that he can buy a new model iPhone for 200 million people – and he will still be a billionaire.
Google’s $50 billion in ad sales from April to June is about what Americans – all Americans – spent on gas and gas purchases last month.
The annual revenue of one of Microsoft’s side businesses, LinkedIn, was almost four times that of Zoom Video Communications, a star of the pandemic, over the past year.
Facebook is expected to spend more cash on its computer centers and offices in 2021 than Exxon spends around the world extracting oil and gas in the ground in a year. .
Amazon fell short of investors’ expectations on Thursday. But over the past year, Amazon’s e-commerce revenue has still increased by $109 billion — a year-on-year increase that Walmart has taken nine years to achieve.
I know that a lot of weird things are happening in the US economy right now. But I cannot adequately explain how unusual these numbers are from the tech superpowers. Maybe that’s why Bezos wants to touch outer space; 5 big tech giants have outgrown the Earth.
It is clearer than ever that America’s tech giants have formed a separate universe in which they are the sun, and everyone else – billions of people, other companies, entire nations. countries and governments – just planets around them.
Perhaps even more surprising than the size and stature of these companies is how they have mostly increased profits in what could or should have been economic conditions that hurt their profits. surname.
I was surprised that Amazon and Apple have shown higher profit margins than these companies for many years – possibly unprecedented. That has happened even though the pandemic has forced those companies to reorganize factories or warehouses, deal with disrupted global shipping, scramble for parts shortages and spend heavily. much to keep their workers safe.
That chaos and unplanned spending should have made companies less profitable, but it didn’t. (Apple spooked investors a bit when it said this week that it was having a hard time getting all the parts it needed over the next few months.)
What does all this mean? Well, for one thing, members of Congress or state attorneys general can look at the numbers and ask: What if, as the Big Tech companies say, they face stiff competition and have could die at any moment, how can profit margins continue to grow like this?
Logic would suggest that if companies are going up against multiple competitors, they may have to cut prices and profit margins will drop. So how does Facebook turn every dollar of revenue, almost all of the ads it sells, into 43 cents of profit—a level most companies can only dream of, and more than Facebook has made. Posted before the pandemic?
I’ve asked over and over in this newsletter if America’s 5 biggest tech giants are invincible. As the gap widens between the super-rich tech superstars and the super-simple, I’m starting to believe the answer is yes.
Before we go…
A red monster mascot appeared on the field during a baseball game in Japan,”devour ‘a security guard and spit him back’ without his uniform. It’s way less threatening than it sounds.