The Glory Run of Big Tech Stocks
Tech stocks have not let the pandemic stop them from getting hold of aviation to oil industries. However, this industry has remained impenetrable to the economic AZN health crisis brought up by the pandemic, with many stocks reaching higher than ever before.
This brings us to the question; will there be more or was this the end of the rally?
Since March, they have not only leaded a precipitous bull run, but have also shown exceptional results since the beginning of this century.
Microsoft, Apple, Facebook, Alphabet and Amazon, also known as Big Tech, represent the value of S&P500 as more than eighteen per cent. This scenario has not been highlighted since the year 2000, whereby Cisco, Microsoft, Exxon Mobil, Intel and General Electric had the highest caps in the market. This bubble burst eventually, which led to the question of whether Big Tech’s current valuations are a warning.
Executives of Amazon, Apple, Facebook and Alphabet were summoned to the hearing of US Congress to make sure that they prevent monopoly in the market and remain competitive. If competition reduces for the big tech, then inflation can take place, leading to an uncertain future.
In a macroeconomic scale, Clouds is also developing. A rise of geopolitical pressure between China and US can create havoc. This can be become the epicentre of volatility of prices, that will further be swayed after the Presidential Elections in US.
However, this does not suggest a setback for the big Tech’s stocks. In recent times, big tech businesses are valued with fair prices and have heavy earnings.
If you observe the date to year profits in these companies, you will see impressive results in the first quarter, which helps maintain US economy.
In the 2nd quarter, you can see that the businesses are moving forward and meeting the predictions of analysts.
Almost all big tech businesses are more successful this year compared to the last one. Considering all the factors, it is safe to say that the future holds much more for these companies. Big Tech companies are lined up in order to collect their market share.
For example, Microsoft has developed and offered a more personal software for computing. The company is bound to grow with its advancements and enterprise solutions, like Azure Cloud. This is their IaaS business. This is a segment of Microsoft’s intelligent cloud, which includes premise servers and enterprise consulting. Last year, Azure had the lowest revenue compared to the rest of Microsoft’s segments. However, now is the biggest generator of revenue. Due to such growths, the stocks will see promising results for the future as well.
Similarly, Apple is also seeing a gradual increase in their products. Moreover, Amazon is experiencing greater demand in web services and e-commerce.
The pandemic has changed our ways of using technology, which is partially how tech companies keep growing. The new ways of the world has given big tech more support and evolution. As they keep exceeding or meeting expectations in growth, share prices can show potential for changes. Although volatility will keep showing on a short term basis due to Covid-19 and politics, the long term progress of companies is inevitable.