Another quarter, another blow-out. Big Tech’s headlong growth spurt continues unchecked, to judge from the latest earnings reports this week. But how big is big?
Tracking the incremental gains in their quarterly reports, it is easy to lose sight of just how large and profitable the leading US tech companies have become — and where, based on their current momentum, they are headed. The scale of their success, and the stock market reaction, is mind-boggling. A day after reporting earnings this week, Microsoft and Google put on nearly $200bn in stock market value between them. Google’s latest advance put its market cap within a whisker of $2tn.
Big Tech’s stock market advance has come in lurches. Last year the big gainers were Apple (which added $970bn on hopes for an iPhone “supercycle”) and Amazon (which gained $700bn from the swing to ecommerce caused by Covid-19). This year it has been the turn of Google and Microsoft, which have put on around $800bn of market cap each on a belief that the pandemic-induced shift to cloud computing and digital advertising will prove lasting.