They were once the BIG 5 — Apple, Microsoft, Amazon, Alphabet, and Facebook – they are now the GIANT 5 as their market capitalisation rose to a new record of $6.6 trillion. Investors are asking where future growth will come from.
Since their combined low point on March 16, 2020 their market capitalisation has soared by 51%. That’s an increase of $2.1 trillion in a little over three months. Since January 2017 these 5 have soared by 164%
Incidentally the rest of the share market is pretty much flat. But that’s not the point I’m raising this ….
Looking at revenue …
Lets compare this revenue growth with everyone else
And revenue streams… where they are making their money now
The total market cap of the Giant 5 (or FAAMG) stocks has tripled over the past five years. Nonetheless, their profitability hasn’t increased anywhere near that rise.
The tech sector and the Giant-5 specifically are already trading at stretched valuations. In order for the rally to continue, they will have to meet the market expectations, and then some.
How are these FIVE going to double their value to ensure their share price keeps growing against the challenges we face in the next few years- Covid-19/ or 20/ 21/ 22/ or 23 ; climate change population change etc etc
So where will they look? Major industries with potential for growth ripe for consolidation are healthcare or education- or a completely new industry
We are set for exciting times .