Big Tech Only Got Bigger in 2020

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The five richest companies in the U.S., all tech companies, have seen their valuations swell during the pandemic

It has been a brutal year for so many people and small businesses. But for the five major tech giants in the U.S. — Microsoft, Apple, Facebook, Amazon and Google — 2020 has merely solidified their dominance, with each company seeing their valuations swell during the pandemic.

Here’s all you really need to know: Altogether, those five companies have seen their market caps increase $2.7 trillion this year alone. Instead of being decimated by COVID-19, Big Tech has only gotten, well, bigger.

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Amazon and Apple, in particular, have thrived during the pandemic. It’s easy to understand why in Amazon’s case: With stores shut down or operating at less-than-full strength — coupled with millions of people looking to stay inside as much as possible — Amazon has become even more of a mainstay for the average American consumer, becoming the go-to spot to order everything from toilet paper to pet food. Amazon reported record sales of $89 billion during the second quarter — the first full-quarter to coincide with the pandemic — and a record quarterly profit of $5 billion. Overall, Amazon’s valuation increased 75% this year to $1.65 trillion. Those gains have only made founder and CEO Jeff Bezos even more entrenched as the world’s richest man. Bezos has seen his personal net worth climb $78.9 billion this year to $194 billion by the end of December.

Apple, meanwhile, has seen its valuation spike 80% in 2020 — a remarkable run for a company already worth more than $1 trillion entering the year. Apple, after adding nearly $1 trillion to its market cap this year, is now worth $2.3 trillion — helping it pull ahead of Microsoft and Amazon in its battle for the title of world’s richest company. This year has shown that, even when the overall economy is suffering, people still want their shiny new tech toys, with Apple on track to sell 195 million iPhones in 2020 — up from the 185 million it sold last year.

Microsoft, as it has since CEO Satya Nadella took over in 2014, continued to climb higher this year, with the company worth about 40% more than it was at the start of 2020. Facebook and Alphabet, the parent company of Google, have been the relative “stragglers” of the group, growing 33% and 28% this year, respectively. Not coincidentally, both companies are facing a handful of antitrust lawsuits from federal regulators and most states attorneys general as the year comes to a close — a fact that has likely dampened investor enthusiasm relative to the other tech powerhouses.

This chart summarizes how the tech Goliaths have gotten, well, even more goliath this year.

And since this year has been defined by coronavirus lockdowns, several “stay-at-home” stocks have to be mentioned if we’re doing a year-end review. Those include:

Zoom, which became a mainstay as millions of people shifted to working-from-home, has seen its valuation increase 414% to $101 billion

Netflix, which also benefited from having people stuck at home and on their couches this year, saw its valuation increase 59% to $232 billion

Roku, for the same reasons Netflix climbed, had its market cap increase 147% to $43 billion

Activision Blizzard, like with the streaming companies, the company capitalized on having more people turn to video games to fill their entertainment void and increased 56% to a $70.8 valuation

Lastly, two other companies any year-end tech roundup has to include: Spotify and Tesla. Spotify bet big on podcasts this year, signing Joe Rogan and Bill Simmons and even Prince Harry and Meghan Markle to podcasting deals. The company’s mission? To be the biggest audio platform in the world, not just the biggest music streaming service.

Investors have so far enthusiastically supported that bet, with Spotify’s valuation jumping from $27.6 billion to $60 billion this year. Tesla, meanwhile, was the single biggest story on Wall Street this year, as millennial and Gen Z traders looked at Elon Musk as Henry Ford 2.0 — the man leading the electric car revolution. Tesla shares rocketed 707% higher in 2020, helping propel Musk to the #2 richest person in the world slot behind Bezos.

So will Big Tech continue to grow stronger in 2021? Wedbush analyst Dan Ives believes so, saying a Joe Biden presidency and a likely GOP-controlled Senate will lead to a “Goldilocks scenario” for Big Tech.

“The chances of major business model changes for tech stalwarts Amazon, Apple, Google and Facebook look slim at the moment, which removes a dark cloud lingering over the tech sector for the past year,” Ives said. “That said, the ongoing (Department of Justice) suit against Google and likely others down the road, remains a clear risk worth watching for the Street as more scrutiny is ahead for (Big Tech) both in the Beltway as well as the (European Union) into 2021 and beyond.”

Sean Burch

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