The crazy growth of Big Tech in 2021

The biggest companies grew to become bigger in 2021.  CNBC's diagram below demonstrated the growth experienced by the various players.  The growth rates from end of 2020 to Dec 2021 are:

• Apple +30%
• Microsoft +50%
• Alphabet +65%
• Amazon +6%
• Tesla +58%
• Meta (former Facebook) +20%
  

While many businesses struggled during the pandemic, these companies grew at mind boggling rates between 6 to 65% in 2021.

 

Extract from CNBC news on 27Dec21 showing growth from end 2020 to 23 Dec 2021

 

 Some quotes extracted from the CNBC 27Dec2021 news article:

“Tech companies getting into the $1 trillion club is almost viewed like a cup of coffee in Silicon Valley now,” Dan Ives, a tech analyst at Wedbush Securities, tells CNBC Make It. “It’s not the mega event that it was just two or three years ago. It shows that Big Tech is in an unmatched position coming out of the pandemic.” 

"Apple, Microsoft, Alphabet, Amazon, Tesla and Facebook added a combined $2.9 trillion to their collective market caps in 2021 as of Dec. 23, according to data from Factset. Here’s how it breaks down, from biggest market cap to smallest."

This have various implications for both economies and the market.  This implies that Big Tech companies enjoy competitive advantages despite the global pandemic.  Is it not surprising that the government would take them to "courts" for lapses in their operations?

When governments take action against the Big Tech, it only meant that the Big Tech are simply too big and somewhat late.

Big Tech have benefited as the regulations are trailing behind their product &services penetration.  Some have called "social media" as the Wild West of business where legislation are playing catching up to the players.  This has left several hurt along the journey with issues like "cyber bullying", "mental health", "(unethical) marketing" and more.

 

I am relieved to see companies such as $AAPL prioritizing user data privacy and security in their recent iOS upgrades.  This has costed $FB an estimated $10 billion worth of revenue.  Various governments are also taking the Big Tech to courts as they address the issues mentioned above.  Data privacy, Data security, personal privacy, freedom of speech, monopolistic practices, anti-competition practices are the other items being worked on.

With data regarded as the new "oil", these Big Tech would continue add to their competitive advantages.  It seems impossible  to imagine that some of the Big Tech can fall in the near future but the governments are trying to close down the gaps.  This may add volatility to the investment journey but I do think that most of these companies can only grow in strength and influence.  

 

My muse

Tesla amongst the 6 Big Tech

Seeing how Meta manage their operations, I cannot see myself investing into $FB.  The others are definitely worth a good look should these are available at good discounts.  Based on their 2021 growth, these companies could double their value (except $AMZN) in less than 5 years.  Personally, I have invested into $TSLA and $MSFT as I support their their causes.  Let us not just invest for a better bank account, let us invest into a better and sustainable future.

 

As always, let us research before we invest.