Apple shares have held up much better than those of its peers over the past month, helping the company achieve a stunning feat: the digital giant is now worth more than Alphabet (Google’s parent company), Amazon and Meta Platforms (parent company of Facebook) combined.
Apple ended Wednesday’s session with a market capitalization of $2.307 billion, according to Dow Jones Market Data. Alphabet, Amazon and Meta were together worth $2.306 billion.
The comparison was reported on Twitter by YouTuber financier Joseph Carlson.
The contrast illustrates the sharp drop in tech stocks this year. Apple was worth $2.913 billion at the end of 2021, according to Dow Jones Market Data. The Alphabet, Amazon, and Meta combination was worth $4.41 trillion at the time.
Shares of Apple have outperformed those of Alphabet, Amazon and Meta over the past month and throughout 2022 in general.
Apple shares are up 4.9% in the past month, while Alphabet shares are down 9.1%, Amazon shares are down 18.5% and Meta shares are down 33%. .3%. Since the start of the year, Apple’s stock has lost 18.3%, while Alphabet’s has fallen by 40.5%, Amazon’s by 44.7% and Meta’s by 73%. .1%.
Apple shares also had a better start to the week than any of these other three Big Tech names, although all four were down.
The four companies each reported earnings last week, and only Apple’s numbers elicited a positive stock reaction. Since then, Meta has fallen below a valuation of $300 billion for the first time since February 2016. The company was valued at $240 billion as of Wednesday’s close.
Earlier this year, Apple became the first company to reach a market capitalization of $3 trillion, albeit briefly. The iPhone maker became a $1 trillion company in August 2018 and two years later became the first company to be valued at $2 trillion.
Under Tim Cook, who in 2011 became chief executive after Jobs’ death, Apple has sharply increased its revenue from services such as video streaming and music. This helped Apple reduce its dependence on the iPhone to around 52% of total revenue in fiscal 2021, from more than 60% in 2018, delighting investors who feared the company would fail. relies too much on its best-selling product.
Still, some investors worry that Apple is reaching the limits of how much it can grow its user base and how much money it can make from each user, with no guarantees that future product categories will prove as lucrative as the Iphone.
The rapid adoption of technologies such as 5G, virtual reality and artificial intelligence has also increased the appeal of Apple and other big tech companies.
In a December note to investors, Bernstein analyst Toni Sacconaghi warned that Apple’s prospects in the augmented and virtual reality category are promising, but are only expected to represent 4% of its revenue by 2030. Moreover, the overall market for such devices is not expected to approach the billion unit mark until 2040, he wrote.
Sacconaghi also saw no obvious catalyst for a multiple expansion in Apple shares given slower expected growth over the next fiscal year. It has a stock performance rating on the stock.
Another concern is uncertainty over Apple’s ability to lock in the same benefits for paid services on its future hardware. Its App Store business model, which charges commissions on in-app purchases of digital products, has been targeted by proposed legislation in the US and Europe.
In February, Facebook’s parent company, Meta, was thrown out of the top 10 most valuable companies in the world (market capitalization) after a series of brutal setbacks in the preceding weeks.
Mark Zuckerberg’s social media giant was worth an estimated $565 billion at market close on Thursday February 19, a startling drop from where it was just months earlier, when Facebook was ranked the sixth most valuable company in the world.
Meta then ranked 11me rank behind other technology companies such as Amazon, Apple, Alphabet and Microsoft, according to Bloomberg. Tesla, Berkshire Hathaway, Nvidia, Taiwan Semiconductor Manufacturing Company and Tencent had all moved up the rankings. Tesla Inc., which had a market value of $906 billion, had taken Meta’s place as the sixth-largest company behind e-commerce giant Amazon.com Inc. Warren Buffett’s Berkshire Hathaway Inc. follows the $700 billion electric vehicle maker, followed by chipmaker Nvidia Corp. $613 billion.
The shares had fallen more than 45% since hitting an all-time high of $384.33 in September 2021, wiping out more than $500 billion in market value during that time. The downturn coincided with the release of a dismal quarterly report that showed Facebook saw its average daily user base decline for the first time in the company’s history. Zuckerberg blamed the stagnation in user activity on increased competition from rival platforms such as TikTok.
Meta lost more than $200 billion in value in a single day of trading following the report in what was the largest one-day drop in market value of any stock in US history, according to Dow. Jones.
Facebook was once a company worth over $1 trillion, thanks to its impeccable tracking system. However, Apple’s new feature that allows its users to choose to block ad trackers has neutralized this strength of Facebook. Even Facebook’s user base began to dwindle after a wave of whistleblower disclosures showing the harmful effects of social media for young users.
And as if that weren’t enough, Meta has done even worse: the company is no longer in the top 20 of the largest market capitalizations in the world. The company has lost 70% of its value this year and 74% since the stock peaked in September 2021, representing a total loss of over $730 billion in market capitalization.
The value of Meta divided by three in one year, the time is not yet to harvest the fruits of metavers
The parent company of Facebook has announced that it expects to generate a turnover of between 30 and 32.5 billion dollars in the last quarter, a figure again below what Wall Street analysts expected. Since September 2021, Meta’s valuation, which then stood at over $1 trillion, has now been divided by three and could reduce further if the bad results continue to accumulate.
The staggering collapse of Meta’s stock price is reminiscent of the days of the dot-com meltdown, but it’s far more significant when it comes to the erased value of a single company. The fall began late last year as signs of a sluggish economy began to appear, and accelerated in early 2022 after the company said the change to iOS by Apple regarding privacy would result in $10 billion in lost revenue this year.
Meta is impacted by lower ad revenue. But the biggest problem of Meta remains its gigantic investments on the Metavers. His expenses increased by 19%. The group continues to bet its future on the metaverse. Meta’s difficulties stem, for example, from its attempt to reinvent its business model to be less dependent on advertising, which brings in less and less revenue. For this, the company has put on the metaverse, in which it swallows huge sums (no less than 21 billion dollars in two years). However, skeptical voices are being heard more and more as virtual reality is struggling to become more democratic, and arousing the mistrust of investors who doubt the ability of such an investment to generate short-term money.
I know many people disapprove of this investment. However, I think it would be a mistake for us not to focus on this area, which I believe will be of fundamental importance in the future, conceded Mark Zuckerberg during the conversation with financial analysts on Wednesday last week. .
Founder and CEO Mark Zuckerberg has been unable to stop the bleeding and only seems to be making the situation worse. A somewhat bewildered Zuckerberg acknowledged on the investor call that there’s a lot going on right now in the company and in the world.
Mark Zuckerberg warned that the company faces near-term revenue challenges, but said the fundamentals are there for a return to stronger revenue growth. He reiterated his main bets, including developing a short-form video to rival TikTok, business messaging and metaverse. He tried to reassure investors that investing in these areas would pay off in the long run. “I appreciate patience and believe that those who are patient and invest with us will eventually be rewarded,” he said, arguing that the company was doing some leading work on the metaverse that would be of historic significance. .
It’s the end of abundance for the GAFAM too. If the crisis caused by the Covid has rather inflated their dynamics, the current geopolitical tensions, unfavorable exchange rates and the now well-established economic crisis have, on the other hand, ended up affecting them. All of them had already announced a hiring hiatus this summer and all of them have more or less started small waves of layoffs to better focus on the most promising and promising projects. But it is above all the outlook for the next quarter that is somewhat panicking the financial markets.
What, in your opinion, can explain Apple’s stock market performance despite the economic context and the difficulties encountered by the other major technological brands?
are you surprised to see Apple worth more than Alphabet, Amazon and Meta in terms of market capitalization? Why ?
What do you think could explain Meta’s collapse? Elements to improve likely to make the company return to growth?
are you convinced by the metaverse as an alternative source of income for Meta?
See as well :
Facebook’s parent company, Meta, is no longer in the Top 10 most valuable companies. Meta lost $513 billion in market capitalization in a few months
Meta Dropped From Top 20 U.S. Stock Market After Tech Glove Releases Q3 2022 Results
Mark Zuckerberg has hinted that Meta may develop an operating system for its metaverse and expects metaverse to generate hundreds of billions in revenue by 2030