$3 Trillion: The Combined Value Of Tech’s Big Five

It’s a little late for Halloween, but there is certainly something almost a bit scary in the combined valuations of tech’s top five players — alternately known as the Frightful Five.  Amazon, Alphabet and Microsoft all managed big beats on the Street last week, and hopes remain high for Apple and Facebook when they take their turns later this week.

Apple shares are up 45 percent on the year, and the early reviews of the iPhone X are solid (as is the competition to buy one). Amazon is up 50 percent since this time in 2016, and Facebook is up 55 percent.  Alphabet and Microsoft are trailing, with stock prices “only” up 30 percent year on year.

But all of them are outperforming the (tech heavy) Nasdaq, which has grown 25 percent this year.

All five stocks are trading at or near all-time highs as well — Apple could even hope to see its market cap hit the $1 trillion mark (currently it is resting at $870 billion), though the iPhone X would have to be a pretty solid hit. As of right now, all five players in the five have a market cap north of half a trillion — and are collectively worth $3.3 trillion.  That, incidentally, is a trillion dollars more than they were worth two years ago.

And, as of now, there is no end in sight. Despite the fact that Google and Facebook are both sitting in the hot seat on Capitol Hill this week, stock prices continue to surge. Wall Street seems basically unbothered about what, if any, connection Facebook or Google’s YouTube may have to the Russian fake news scandal — and seems unconcerned about its potential effect on either firm. This may be because, between the two of them, Facebook and Google form a stable duopoly when it comes to the digital advertising market.

And this kind of lack of concern seems endemic — the iPhone X’s apparent success has glossed over concerns about the iPhone 8’s weak sales and that Apple is overly reliant on its iPhone brand. Amazon is perpetually accused of stretching itself too thin.

But each of the five are essentially and massively profitable in their core business — and are working hard to dominate others (cloud computing, AR/VR tech).

The may be frightful for some time to come.