Big Tech Is Winning Over Wall Street
While Wall Street remains fully engrossed by NVIDIA, there is a story to be told that is flying under the radar.
While Wall Street remains fully engrossed by NVIDIA, there is a story to be told that is flying under the radar. With several key macro headwinds now in the rearview mirror, Wall Street has turned decidedly more optimistic on Big Tech (a bucket that I have long defined as including Apple, Alphabet, Meta, Amazon, Microsoft). Big Tech as a group is up 28% in 2024 while the S&P 500 is up 15%.
Here are Big Tech market caps, with NVIDIA added in for good measure:
Microsoft: $3.3T
Apple: $3.2T
NVIDIA: $3.0T
Alphabet: $2.3T
Amazon: $2.0T
Meta: $1.3T
A couple things jump out at me about those totals.
Become a member today to continue reading. Already a member? Sign in and read the full essay here.
Payment is processed by Memberful and secured by Stripe. Apple Pay and other mobile payment options are accepted. Special bundle pricing is available for Above Avalon members.
Member Privileges and Benefits
Receive Exclusive Essays. The cornerstone of an Inside Orchard subscription is access to Neil’s weekly essays on the latest developments in the technology industry. Weekly essays are ~1,000 words and sent via email. Essays revolve around the following topics: technology industry analysis, business model analysis, technology’s impact on societal and consumer trends. Create a free profile to read a few sample essays.
Access Exclusive Private Podcast. Listen to Inside Orchard essays via an exclusive private podcast. After becoming a member, all previously-published podcast episodes become available in your favorite podcast player. Podcast episodes never become available to the public.
Inside Orchard Support. Play an active role in supporting Inside Orchard as an independent source of analysis and perspective. Inside Orchard is 100% supported by its subscribers.
Funding the Next Big Thing in Tech
One takeaway from the just concluded earnings season in tech land is that the giants are not alike. Each is facing its own set of business and financial challenges – both macro and micro. Despite the challenges, each of the giants is determined to fund the next big thing. What had been periodic jitters about ballooning costs and expenses has turned into full-fledged anxiety and concerns on Wall Street.
An Inside Orchard subscription is required to continue reading this essay. Subscribers can read the essay here.
(Subscribers: The password for reading exclusive essays is always accessible by logging in and going to Downloads.)
Inside Orchard Subscriptions
Payment is processed and secured by Stripe. Apple Pay and other mobile payment options are accepted. Special bundle pricing is available for Above Avalon members.
Subscriber Privileges and Benefits
Receive Exclusive Essays. The cornerstone of an Inside Orchard subscription is access to Neil’s weekly essays on the latest developments in the technology industry. Weekly essays are 1,000 words and sent via email on Mondays. Essays revolve around the following topics: technology industry analysis, business model analysis, technology’s impact on societal and consumer trends. A sample essay can be viewed here.
Access Exclusive Private Podcast. Listen to Inside Orchard essays via an exclusive private podcast. After becoming a paid subscriber, all previously-published podcast episodes become available in your favorite podcast player. Podcast episodes never become available to the public.
Inside Orchard Support. Play an active role in supporting Inside Orchard as an independent source of analysis and perspective. Inside Orchard is 100% supported by its subscribers.
The Absurdity Known as the Digital Markets Act
For the past two years, the European Commission has been formulating a series of regulations aimed at curtailing the tech giants in its 27 member states. Last week, the Digital Markets Act reached a finalized draft stage. While additional steps are needed before the end is reached, we are at a point where the major points of contention have been determined with implementation set to begin later this year. We are seeing the equivalent of the tech giants being taken hostage and told to both open their platforms to perfectly capable competitors and ensure that these same competitors don’t abuse their opportunities to harm consumers. It’s absurdity. There is no other way to describe what we are seeing. Customers in the EU don’t stand to benefit from the regulations. And as we will discuss shortly, a good argument can be made that the giants will be able to navigate the legislation without losing much, if any, momentum in the impacted countries.
At the heart of the issue is EU officials viewing the giants, or so called “gatekeepers,” as blocking or preventing smaller competitors from getting a fair shake.
An Inside Orchard subscription is required to continue reading this essay. Subscribers can read the essay here.
An audio version of this essay is also available to subscribers. Sign in for instructions on getting the private podcast up and running in your favorite podcast player.
Choose either a monthly or annual subscription. Payment is processed by Memberful and secured by Stripe. Apple Pay and other mobile payment options are accepted. Special bundle pricing is available when subscribing to the Above Avalon Daily newsletter.
Subscriber Privileges and Benefits
Receive Exclusive Essays. The cornerstone of an Inside Orchard subscription is access to Neil’s essays on the latest developments in the technology industry. Weekly essays are ~1,000 words and sent via email. Essays revolve around the following topics: technology industry analysis, business model analysis, technology’s impact on societal and consumer trends. Create a free profile to read a few sample essays.
Access Exclusive Private Podcast. Listen to Inside Orchard essays via an exclusive private podcast. After becoming a subscriber, all previously-published podcast episodes become available in your favorite podcast player. Podcast episodes never become available to the public.
Inside Orchard Support. Play an active role in supporting Inside Orchard as an independent source of analysis and perspective. Inside Orchard is 100% supported by its subscribers.
Microsoft’s Growing Bet on Gaming
It may be tempting for an outsider to dismiss gaming as a hobby for Microsoft. Doing so would make it difficult to understand the company’s multi-decade bet on gaming. Reported within the same business segment as Windows and Surface, gaming is about twice as large of a business as Surface when looking at revenue. One can argue from a mindshare perspective that the difference is much larger. Prior to Microsoft correctly pulling the plug on its brick and mortar stores, proponents had argued that the stores should be kept open just to showcase Xbox.
Last week, Microsoft announced its intention to buy Activision Blizzard in a $68.7 billion all-cash deal.
An Inside Orchard subscription is required to continue reading this essay. Subscribers can read the essay here.
(Subscribers: The password for reading exclusive essays is always accessible by logging in and going to Downloads.)
Inside Orchard Subscriptions
Payment is processed and secured by Stripe. Apple Pay and other mobile payment options are accepted. Special bundle pricing is available for Above Avalon members.
Subscriber Privileges and Benefits
Receive Exclusive Essays. The cornerstone of an Inside Orchard subscription is access to Neil’s weekly essays on the latest developments in the technology industry. Weekly essays are 1,000 words and sent via email on Mondays. Essays revolve around the following topics: technology industry analysis, business model analysis, technology’s impact on societal and consumer trends. A sample essay can be viewed here.
Access Exclusive Private Podcast. Listen to Inside Orchard essays via an exclusive private podcast. After becoming a paid subscriber, all previously-published podcast episodes become available in your favorite podcast player. Podcast episodes never become available to the public.
Inside Orchard Support. Play an active role in supporting Inside Orchard as an independent source of analysis and perspective. Inside Orchard is 100% supported by its subscribers.
Measuring Tech’s Diffusion in Society
One of the main drivers behind starting Inside Orchard was analyzing how the lines that have traditionally defined technology are being erased. The “tech industry” is a term with a finite lifespan. We are heading to a point where tech will be so diffused in industry that it will be indistinguishable from society as a whole.
A question that has been raised is how to measure such diffusion. The answer can serve as a valuable tool for knowing which industries have either already experienced such diffusion or are about to undergo significant transformation. Get the timing right, and there are significant financial and product strategy rewards up for grabs.
An Inside Orchard subscription is required to continue reading this essay. Subscribers can read the essay here.
(Subscribers: The password for reading exclusive essays is always accessible by logging in and going to Downloads.)
Inside Orchard Subscriptions
Payment is processed and secured by Stripe. Apple Pay and other mobile payment options are accepted. Special bundle pricing is available for Above Avalon members.
Subscriber Privileges and Benefits
Receive Exclusive Essays. The cornerstone of an Inside Orchard subscription is access to Neil’s weekly essays on the latest developments in the technology industry. Weekly essays are 1,000 words and sent via email on Mondays. Essays revolve around the following topics: technology industry analysis, business model analysis, technology’s impact on societal and consumer trends. A sample essay can be viewed here.
Access Exclusive Private Podcast. Listen to Inside Orchard essays via an exclusive private podcast. After becoming a paid subscriber, all previously-published podcast episodes become available in your favorite podcast player. Podcast episodes never become available to the public.
Inside Orchard Support. Play an active role in supporting Inside Orchard as an independent source of analysis and perspective. Inside Orchard is 100% supported by its subscribers.
Problems With Work From Home Are Beginning to Emerge
Last week, Microsoft changed its return to the office timeline to officially put off employees coming into the office indefinitely. COVID, and in the particular the Delta variant, was the stated reason for the change. I don’t think Microsoft, or any other company delaying return to the office indefinitely, is being entirely up front about all of the forces driving such announcements.
An Inside Orchard subscription is required to continue reading this essay. Subscribers can read the essay here.
(Subscribers: The password for reading exclusive essays is always accessible by logging in and going to Downloads.)
Inside Orchard Subscriptions
Payment is processed and secured by Stripe. Apple Pay and other mobile payment options are accepted. Special bundle pricing is available for Above Avalon members.
Subscriber Privileges and Benefits
Receive Exclusive Essays. The cornerstone of an Inside Orchard subscription is access to Neil’s weekly essays on the latest developments in the technology industry. Weekly essays are 1,000 words and sent via email on Mondays. Essays revolve around the following topics: technology industry analysis, business model analysis, technology’s impact on societal and consumer trends. A sample essay can be viewed here.
Access Exclusive Private Podcast. Listen to Inside Orchard essays via an exclusive private podcast. After becoming a paid subscriber, all previously-published podcast episodes become available in your favorite podcast player. Podcast episodes never become available to the public.
Inside Orchard Support. Play an active role in supporting Inside Orchard as an independent source of analysis and perspective. Inside Orchard is 100% supported by its subscribers.
The Pandemic Isn’t Fueling Tech
With the 1Q21 earnings season coming to a close, we have a good view of how the world’s largest companies performed during the first three months of 2021. Impressive would be the word. Consider the following year-over-year revenue growth figures:
Apple: 53%
Facebook: 48%
Amazon: 44%
Alphabet: 34%
Microsoft: 19%
An Inside Orchard subscription is required to continue reading this essay. Subscribers can read the essay here.
(Subscribers: The password for reading exclusive essays is always accessible by logging in and going to Downloads.)
Inside Orchard Subscriptions
Payment is processed and secured by Stripe. Apple Pay and other mobile payment options are accepted. Special bundle pricing is available for Above Avalon members.
Subscriber Privileges and Benefits
Receive Exclusive Essays. The cornerstone of an Inside Orchard subscription is access to Neil’s weekly essays on the latest developments in the technology industry. Weekly essays are 1,000 words and sent via email on Mondays. Essays revolve around the following topics: technology industry analysis, business model analysis, technology’s impact on societal and consumer trends. A sample essay can be viewed here.
Access Exclusive Private Podcast. Listen to Inside Orchard essays via an exclusive private podcast. After becoming a paid subscriber, all previously-published podcast episodes become available in your favorite podcast player. Podcast episodes never become available to the public.
Inside Orchard Support. Play an active role in supporting Inside Orchard as an independent source of analysis and perspective. Inside Orchard is 100% supported by its subscribers.