Tech giants have entered the “afternoon”?

Investment bank Macquarie believes that big consumer technology companies like Facebook and Amazon have entered the “afternoon” phase.

“ Investors have to be very careful when approaching companies like Meta or Alphabet, because like I said, these companies are going downhill and facing some problems ,” said Viktor Shvets, global head of strategy demand and Asia at Macquarie Capital. He also named several other similar companies such as Apple and Alibaba.

Impediments may include “the size of the major economies” as well as pronounced socio-political pressures. “ We have to be very careful with these digital platforms, but the rest of the tech world has plenty of opportunities to make money ,” Viktor asserts.

In recent years, technology giants in the US and China are under the strict management of the authorities.

Last year, China got tough on technology companies when it legalized a range of areas, from antitrust to data protection.

Shares of Tencent, Alibaba and Didi all sold off as the companies caught the eye of the government. As of the close on February 11, the Hang Seng Tech Index (a stock index based on the market capitalization of the 30 largest technology companies listed on the Hong Kong Stock Exchange) was still lower than 40% compared to 2021.

Meanwhile in the US, President Joe Biden signed a new executive order to prevent the anti-competitive practices of Big Tech, as well as a number of other areas.

Which company can make a change?

Viktor thinks that the world is transitioning from the second generation of technology to the third generation. The question is, can tech companies survive this pivotal transition?

“ One of the things we take away from transfers like this, is that only one or two companies can really pull through. For example, Microsoft is the only major tech company that can go from first generation to second generation when most no one else can .”

“ So the question with these major digital platforms, is which company has the opportunity, or the capacity and the potential to really transform? At this point, everything is not clear. Will investors bet on Meta, Google or Alibaba? “, a representative of the investment fund Macquarie shared.

Big Techs like Meta, Apple, Google, Microsoft are racing to launch hardware products and software services related to the virtual universe (metaverse), the term referring to the virtual world where people interact and participate in events. performing music, sports, and gaming through virtual or augmented reality devices.

The market is fiercely competitive in China

Technology companies in this country of billions of people are not only under enormous pressure from the law, but also face fierce competition.

Roderick Snell, investment manager at Baillie Gifford (headquartered in Edinburgh), said that in recent years the fund has reduced its proportion of holdings in stocks of big technology names such as Alibaba and Tencent.

“ I think the biggest problem for Alibaba and Tencent is that they are where the competition is fiercest in emerging markets. In just three or four years, 40% of Tencent’s social media advertising market share has gone to other players. A great competition is going on. So we downsized the company and continued to look for opportunities elsewhere. This is likely to continue into the future ,” Roderick confirmed.

According to CNBC