MarketLine Blog

Trillion dollar companies: Apple, Amazon, Facebook and Alphabet all in contention to be the first

For many years analysts have been considering which companies might actually reach the staggering level of a trillion-dollar market capitalization company. Over the last decade the leaderboards have seen change with the big oil companies dropping out of contention for the top spots and instead the big tech giants working their way up to the top along with the entrance of new Chinese companies and global banks. These companies have new freedoms, such as being able to avoid having to post profit in favor of extreme growth. Of the top companies in market cap terms, Amazon is the most dominant, whilst not yet as big as Apple wherever Amazon comes into competition with the others it usually comes out on top because of its incredible resources and aggressive business plans. Provided Amazon can avoid regulators attempting to break it up, it will be the first of the four tech giants to get to a trillion.

Apple has shown itself to be something of a cyclical business that lives or dies on the quality of its last iPhone launch and what the market thinks of it. This means with any one launch that doesn’t go well Apple’s market cap is extremely vulnerable and despite Apple’s great track record it is inevitable some product launches will be troublesome. As it stands, despite Apple being a consistently popular company with the markets it seems there are perhaps better placed companies that might reach the trillion-dollar market cap level sooner.

In 2018, the Cambridge Analytica scandal dropped, which revealed that unscrupulous companies were using Facebook’s staggering levels of data on its users, to target particular users and spread false information for the sake of political campaigns or other purposes. What was also revealed to the public, perhaps for the first time comprehensively, was the extent of the data collection that Facebook does, which included extremely in-depth analysis of behavior patterns, relationships and private information. Facebook in early 2018 has to deal with this scandal and public concern and prove that its practices are now able to detect that kind of issue in future. For Facebook, its 2018 financial year could quite easily be damaged by this scandal and so it is unlikely that Facebook will reach the trillion-dollar mark any time soon, considering advertising through Facebook to its users represents 98.3% of its revenue.

Google, the search engine giant, has been acquiring numerous companies looking to develop new revenue streams to help support its main one which is overwhelmingly advertising. However, for the most part, these enterprises have ended up supporting the main channel of the business or fallen short of the target to create significant revenue and been sold off. For instance, Google made around 11 significant acquisitions in 2017 and they were mainly companies that made breakthroughs in particular technologies, such as software, AI, data science, analytics, computer vision and other tech related items.

The first and most serious contender amongst the world’s biggest companies and most likely to reach the trillion-dollar market cap point is undoubtedly Amazon, provided it can escape the eyes of the regulators that must surely be watching it at this point. Amazon is dominant in a wide variety of business spaces to the extent that almost wherever it goes it can use its incredibly cheap capital to start absorbing business from other companies. The primary reason why it beats the other three tech businesses in this report is that it is actually beating them in various business areas at the moment. In the device space, Amazon’s Kindle and Alexa devices have been the breakthrough devices of the last few years, not any of Apple’s. In the search engine Space, Amazon is out competing Google for product discovery and Alexa is more ubiquitous than Siri or Google Assistant.

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  • Saddle up, because apparently AA has never signed a big FA. He”s made all his bones by being a wheeler-dealer trader. The biggest reason for optimism for the big league team, as I”ve oft mentioned, is that there is not a whole lot of true chaff to get rid of on the active roster. Plus, before the trade deadline, the Braves are going to doubtless need to free up a few 40-man slots. There may be a few worth trying to pass through waivers but better to try to get some value in return for a bundle. All of this means that the trading will begin sometime this summer. Assuming the Braves are performing decently and in some form of contention, I can”t help but believe that AA will try to make an impact move. I predict he”ll try to bring in an impact power bat (3B or OF) and an impact reliever. I hope he deals only out of what should be dealt (Markakis, Wisler, Blair, Sims, Ruiz, etc) but you have to give value to get value. He may not have to give much if he only goes after a rental and then decides to play in the FA market next year. But competing for FAs has not been his history. Interesting idea for a rental Adrian Beltre if TEX falls out of contention.

    Vittorio on 10 April 2018 at 9:24pm

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