Big Tech Has Outgrown This Planet
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Big Tech’s already crazy dollars just got crazier.
My colleagues and I have written extensively on the unreal sales, profits, and punch of America’s five tech titans: Apple, Microsoft, Google, Amazon, and Facebook. This may sound like old news. Tech’s Titanic 5s have long been tall and wealthy, and they are even more so as people and organizations needed their products during the coronavirus pandemic. Yadda, yadda, yadda. We understood.
But no, we really don’t understand. America’s tech superstars have stepped into a completely different stratosphere than other successful companies in tech and beyond.
Let me give you a taste of the madness:
The current market value of the Big Five ($ 9.3 trillion) is greater than the value of the next 27 top-valued U.S. companies, including giants like Tesla, Walmart and JPMorgan Chase, according to data from S&P Global Market Intelligence.
Apple’s profits over the past three months ($ 21.7 billion) were nearly double the combined annual profits of the five largest US airlines in the pre-pandemic 2019 period.
Amazon’s stock price increases made Jeff Bezos so rich he could buy a new model of iPhone for 200 million people – and he would still be a billionaire.
Google’s $ 50 billion in revenue from ad sales from April to June was what Americans – all americans – spent on gasoline and gas station purchases last month.
The annual revenue of one of Microsoft’s side businesses, LinkedIn, is nearly four times that of pandemic star Zoom Video Communications last year.
Facebook expects to distribute more money to equip its data centers and offices in 2021 than Exxon spends globally to extract oil and gas from the ground in a year.
I know a lot of strange things are happening in the US economy right now. But I can’t adequately explain how unnatural these numbers are for tech superpowers. Maybe that’s why Bezos wanted to touch space; the Big 5 tech giants have overtaken Earth.
What is clearer than ever is that the titans of American technology have formed a separate universe in which they are the sun, and everyone – billions of humans, other businesses, countries and communities. entire governments – are simple planets revolving around them.
What is perhaps even more surprising than the size and scale of these companies is how they became for the most part more profitable under economic conditions that could or should have hurt their profits.
I was taken aback by the fact that Amazon and Apple have had higher profit margins than these companies for years, maybe never. This happened even as the pandemic forced these companies to reorganize factories or warehouses, deal with disrupted global shipments, scramble to find rare parts and spend a fortune to keep their workers safe. .
This chaos and unforeseen expenses should have made companies less profitable, not more. (Apple scared investors a little by saying this week that it was struggling to get all the coins it needed for the next few months. Amazon will release its financial results later Thursday.)
What does it all mean? Well, on the one hand, members of Congress or state attorneys general might look at the numbers and wonder: if, as the big tech companies say, they face stiff competition and could die at any moment, how could profit margins continue to increase like this?
Logic suggests that if companies fight off many competitors, they might have to cut prices and profit margins would decline. So how does Facebook turn every dollar of revenue, almost entirely from the ads it sells, into 43 cents of profit – a level most businesses can only dream of, and higher than Facebook posted before? the pandemic?
I have asked time and time again in this newsletter if America’s 5 tech giants are invincible. As the gap continues to widen between super rich tech superstars and simply super superstars, I’m starting to believe the answer is yes.
Kisses to that
A red monster mascot appeared on the field during a baseball game in Japan, “swallowed “a security guard and spat it out without his uniform. It’s a lot less threatening than it looks.
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