Decipher the ‘impossibility’ of 5 technology giants worth more than US $ 5,000 billion: The more hated, the more sublimated!

In 2018, a new word was added to the Silicon Valley vocabulary: “Techlash,” referring to the negative reaction of users to the growing power and influence of tech giants, especially companies based in Silicon Valley.

But despite the fact that regulators often discuss new rules or activists are concerned about the privacy of users, shares of the five largest technology companies in the United States increased sharply over the past 12 months, averaging 52%. Alphabet, Amazon, Apple and Microsoft now all have a market capitalization of over $ 1,000 billion while Facebook is worth about $ 620 billion.

The skyrocketing share price of these 5 giants has raised two concerns. One is whether investors are triggering speculative bubbles because these five companies account for nearly one-fifth of the value of the S&P 500 index of US stocks. The last time the market had such a focus was 20 years ago, before an incident that caused widespread recession.

On the other hand, the opposite concern is that investors may be right: The 5 tech giants with such “super” valuations show that their profits could double in the next decade, causing a lot of impact. economic dynamics in rich countries and the alarming concentration of economic and political power.

The anxiety of bubbles is a fundamental concern: The technology cycle is an integral part of the modern economy. The 1980s saw the explosion of semiconductors. By the 1990s, there was the emergence of computers and the internet.

Then the new cycle began in 2007 with the launch of the iPhone. By 2018, this cycle has shown its decline. Stagnant smartphone sales, Facebook’s data scandals angered users about the tech giant’s privacy approach. Global antitrust regulators have issued warnings and the bad results of unicorns like Uber and WeWork have also worried people.

Users say they care about their privacy but act as if they are more interested in using it for free. Since the end of 2018, the number of Facebook’s service users (including Instagram, Messenger and WhatsApp) has increased by 11%, to 2.3 billion.

Regulators have punished many major tech companies for their tax, privacy and misbehavior in competition. However, their efforts seem nowhere to be compared to the huge market value of these companies.

Meanwhile, many parts of the economy have not yet been digitized. In the West, only one-tenth of retail sales are online and perhaps one-fifth of the cloud computing workloads of Amazon and Microsoft.

While they may diversify into more industries, from health care to agriculture, the reaction against them may not go away, or even grow. As the tech giants expand, the profits of many non-tech companies will suffer and their employees will feel discontent.

Alphabet, Amazon, Apple, Microsoft and Facebook are employing 1.2 million people and are currently the largest investors in the US, spending nearly $ 200 billion a year. Their decision on whether to tighten suppliers, cut investment or attack weaker rivals will cause much controversy. And China, which always wants to keep internet giants under state control and is less dependent on Silicon Valley.

At least 27 countries have or are considering digital taxes. The European Union (EU) wants every individual to own and control their own data, although this can take years to innovate. Or even in the US, antitrust groups are working hard to curb small startups being swallowed up by tech giants, which have contributed to the success of Alphabet and Facebook.

The market value of more than $ 5,000 billion of 5 Silicon Valley tech giants is testament to the most commercially successful companies ever created and does not exclude the possibility that they will be much bigger than now no matter how closely the world seeks to monitor it.