Big Tech companies have witnessed a remarkable surge in their influence. This influence is not only felt within the technology sector alone but also in the global stock market. This influence has reached unprecedented levels in recent years, contributing to the stock market’s soaring performance despite the economic challenges of recent years.
Tech titans like Apple, Facebook, Amazon, Microsoft, and Alphabet have propelled the stock market to unprecedented highs, defying the overall economic struggles faced by various industries due to the pandemic.
However, concerns about the economy and society have been heightened because of the rise of Big Tech companies. Hence, focusing on Big Tech’s impact on the global stock market, this article will examine the firms’ current performance, the outlook for the future, and prospective effects on the economy.
Recent Performance Of The Big Techs
Looking at the exponential growth of these tech titans, they’ve undoubtedly had some of the best-performing stocks in recent years, skyrocketing their market size. Credit Suisse reported the S&P 500 decreased by 6% in the first 7 months of 2020, while the five largest publicly traded businesses in the United States (Apple, Amazon, Microsoft, Alphabet, and Facebook) increased by 37%. In February of 2022, the combined market capitalization of Amazon, Apple, Google, and Microsoft exceeded $1 trillion.
Further, both Microsoft and Apple are worth over $2 trillion, but Apple is worth about $3 trillion. But recently, the stock market has turned against the technology industry. Many of the biggest companies’ stock prices have decreased because of uncertain factors like Omicron, inflation, and likely interest rate hikes.
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Future Outlook for Big Tech
Even though big tech companies have been facing problems recently, there are still chances for them in the future. J.P. Morgan Research says that the most important opportunities for Big Tech companies in 2023 will be to cut costs and focus on long-term growth drivers. However, the sector will also face problems like inflation and currency fluctuations, stiff competition from other goods and services, problems with the supply chain, and high-cost structures.
For example, Silicon Valley had a hard time in 2022. Also, after over a decade of steady growth and a boom caused by a pandemic, Big Tech titans like Meta, Apple, and Alphabet lost about $2.5 trillion in market value due to problems with the global supply chain, the economy, and falling sales. Hence, the future of Big Tech is hard to predict, and the industry will have to change with the market to stay competitive.
Potential Impacts of Big Tech on the Economy
The emergence of the tech titans has raised economic and societal concerns. Experts claim huge tech corporations have stopped inventing and begun profiting from their data, weakening small and medium-sized businesses. The market indexes are particularly sensitive to the performance of major firms, and any unfavorable developments may have a domino impact on the market.
Others fear that big tech companies have too much money; for instance, the top three tech giants had a stock market capitalization of 5.5$ trillion by December 2020. However, big tech companies could also help the economy by putting money into clean energy and making energy systems that are better and more flexible.
Summarily, Big Tech companies have grown into formidable competitors on the international stock market. Despite their recent success, Big Tech faces an unclear future and will have to overcome obstacles in the years to come. Future research and debate are necessary to fully understand the wide-ranging effects that Big Tech could have on the economy.