BIG TECH & BIG ECONOMY

The direct connection between Big Tech size and that of the economy is being established country after country. The countries who get it right are scaling past one milestone after another in their economic history. The ones who don’t might not accept but more often than not, they would have missed out  at least  for that economic cycle. The Big Tech seems to have made themselves immune to cyclical economic changes and the market and keep on delivering consistently, nonetheless, the percentage of growth in the share market terms, throws up some differentials. Most interesting part about this growth is that most of these companies, unlike automobile and other sectors, propel all their sectors to grow. They are the consumers of the Big Tech products and services.

For every one dollar which Microsoft earns, its associates earn another nine dollars in different geographies all over the world. Big Tech IT has directed the world’s digital transformation and today the world is at the threshold of being taken over by them. Or has it happened already? The transformational capability of Big Tech is both transformational to the economy and the business processes. The disruptive technologies can change the fate of the nation, which on one would not have even imagined. Shenzhen as a city is a case in point. Big Tech has become the true indicator of any economy today. Their contribution to the US and the world is phenomenal.

Big Tech collectively added $2.45 trillion in value in the year 2021, when the world economy was in the throes of waves and troughs of the pandemic. The performances varied from Alphabet’s 65% surge to Amazon’s 2.4% slog. It has been reported that Microsoft, Apple and Alphabet were among the three biggest contributors to the S&P Index 2021 gains. 2021 has been the third consecutive year when the Big Tech continued their winning streak seemingly completely immune to the tumultuous world economic environment. Five of the market’s notable names, internet / tech companies – Apple, Microsoft, Google parent Alphabet Inc, Amazon.com Inc and Facebook parent Meta Platforms Inc have collectively added $2.45 trillion to their market capitalization, in one calendar year.

Investor faith is at its highest, as they tie the future of the world, with the fate of these companies. For Alphabet this was the strongest year for the stock since 2009. It also joined Microsoft and Apple briefly in the $2 trillion club. It gained from growth in Cloud business and increase in digital ad spending helped. Microsoft’s stock has gained for 10 consecutive years, it’s longest rally. It gave double digit returns for nine straight years. Apple’s three years’ rally have brought them within the striking distance of a historic $3 trillion market capitalization. This is despite shortage of chips and the ongoing pandemic. Meta rose by 23%, high user engagement and the perceivable shift of advertising budgets towards social media holds the key. Amazon shares have soared nearly 1000% since 2014. These 5 Big Tech members are a global economy in themselves.