Top Five Fills Up with Tech, Says S&P | Koeppel Direct

Top Five Fills Up with Tech, Says S&P

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For the first time in several decades, the five most valuable companies by market capitalization are all from the same industry.

It probably comes as no surprise that the industry in question is the technology sector. Amazon, Alphabet, Inc and Apple (the other two of the top five are Microsoft and Facebook) are the biggest names in anything right now, all coming at their enormity with entirely different approaches and despite unique challenges in the marketplace.

The Name of Amazon’s Game is Reinvestment

Anyone who is familiar with Amazon’s playbook knows it has essentially one play: reinvestment over earnings. That strategy seems to be paying out well, the company’s most recent earnings call revealed a profit of more than $1 billion, a result of a 38% revenue increase to $60.5 billion.

Amazon has invested heavily in cloud computing, creating its own original content and Hollywood-style studio and started breaking into brick and mortar retail with its purchase of Whole Foods this year.

Google’s Got a Hand in Everything

Google’s parent company, Alphabet, recorded its 32nd consecutive quarter of revenue growth meeting or exceeding 20 percent. Although Google handles about 90 percent of the Internet’s searches and Alphabet owns YouTube, the most influential video site online, the group has many other investments working in the background.

From selling ads online and on YouTube, cybersecurity, cloud computing investments and projects like the much-anticipated self-driving car technology, Google has done well to diversify within the tech sector.

Apple is Still Relying on iPhone a Bit Too Heavily

Apple saw a revenue growth around 13 percent, totaling $88.29 billion, largely fueled by its move to increase smartphone prices, including the new iPhone X that tops out around $1,000. Apple finally saw profits pass the $20 billion mark, demonstrating that it may be able to survive on its services business as smartphone sales slow in saturated markets.

Despite all the good news, there’s worry in the air. Some feel these tech giants have too much control over people’s daily lives. The big question lawmakers and legal experts have for these entities and the public is just how much control companies should have over consumer data and the impact of their products on society at large. This is an especially difficult question to answer now that data mining and tech are such a big part of daily life.

 

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