Is this really the end of the golden age of GAFA?

We have been talking a lot for some time now about the crisis affecting the American digital giants, the famous Gafa: Google Apple Facebook and Amazon. If they have lost their luster, they can however remain confident.

With inflation, we buy less on Amazon, and advertisers reduce their spending on Google

We can’t deny that Google, Amazon, Facebook – which has renamed itself Meta – and other players like Netflix or Zoom have lost some of their luster. During the month of November which has just ended, we have witnessed a veritable bloodbath on these values ​​on Wall Street. The biggest groups lost, before rebounding a little, more than 1,000 billion dollars on the stock market. It is enormous. But it is not because these Gafa are doing less well that they are necessarily going very badly.

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Why are they sanctioned in the financial markets? The stock market buys growth. A stock goes up when investors bet that tomorrow will be better than today. And it’s true that for several of these giants, we can no longer be certain that things will be much better tomorrow. Groups like Amazon and Google are suffering from the economic situation. When there is inflation, we risk buying fewer things on Amazon. When there is a crisis, advertisers are tempted to reduce their ad spend on Google. And there are players like Facebook who are in competition with rivals like TikTok, they add a situational and structural problem. But that doesn’t mean you have to bury these giants.

Amazon has spent 60 billion on R&D over the last twelve months

If they are falling on the stock market, it is also because they have experienced a mad progression. Over 5 years, Apple’s stock price has jumped by more than 250%. And these groups are part of our daily lives in a crazy way. There are over 1 billion iPhones in our pockets. There are even more people every day on Facebook. Google, which is banned in countries like China and Russia, accounts for 90% of Internet searches worldwide, and its YouTube branch generates more revenue than Netflix. These groups control our daily digital lives and, above all, no one can invest as much as them in the technologies of tomorrow. Amazon has spent 60 billion on R&D over the last twelve months, that’s as much as the turnover of Airbus. The kings of Silicon Valley will not win all their bets, but in terms of artificial intelligence, quantum computing, voice recognition, electronic miniaturization, metaverses, autonomous cars, robotics or weapons of the future, they should still be the strongest.

David Barroux

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