Headline, May 25 2022/ SLUMP : ''' '' BIG TECH BIT '' '''

SLUMP : ''' '' BIG 

TECH BIT '' '''

REMOTE STUDENTS AND EMPLOYEES SPLURGED on new iPhones, iPads and Macs. While over the last decade and a half, The World Students Society never earned a single penny.

Apple, Amazon, Microsoft and the parent companies of Facebook and Google have lost $2.7 trillion in value so far this year, about the annual gross domestic product of Britain.

So what have the companies done about this thrashing on Wall Street? Microsoft has doubled its employees' bonus pool, Google has committed to hiring more engineers, and Apple has showered its top hardware talent with $200,000 bonuses.

The dissonance between the stock market's relative panic and the business-as-usual calm among tech giants foreshadows a period when analysts, investors and economists predict that the world's largest companies will increase their leads in their respective markets.

The bullishness about their prospects reflects an understanding that the companies have tight control of some of the world's most lucrative businesses : social media, premium smartphones, e-commerce cloud-computing and search.

Their dominance in those arenas and toeholds in other businesses should ease the pain of inflation, even as those challenges hammer big companies such as Walmart and Target and the stock market nears bear market territory.

The S&P 500 spent much of Friday below the threshold for what is considered a bear market -commonly defined as 20 percent below its last peak - before rallying late in the afternoon.

In the months ahead, Microsoft, Google, Apple and Amazon are expected to increase hiring, buy more businesses and emerge on the other side of a bearish economy stronger and more powerful - even if they shed some of their total valuation and their relentless growth of the last few years.

''Big tech can say, Forget the economy,'' said Richard Kramer, founder of the London-based advisory firm Arete Research. Flush with cash, he said, '' they can invest through the cycle.''

The large companies' plans contrast sharply with a wave of spending cuts crashing through the rest of the tech sector.

Steep declines in share prices at unprofitable companies such as Uber, down 45 percent, and Pelloton, down 58 percent, have led their chief executives to cut jobs or consider layoffs. Start-ups are pruning their workforces as venture capital funding slows.

Those companies' plummeting values will create buying opportunities, said Toni Sacconaghi, a tech analyst at Bernstein, a research firm. Large deals may be difficult because the Federal Trade Commission is scrutinizing takeover moves by Facebook, Apple, Amazon, Microsoft and Google, he said, but smaller deals for emerging technology or engineers could be rampant.

During the Great Recession, Facebook, Amazon, Google, Apple and Microsoft acquired more than 100 companies between 2008 and 2010, according to Refinitiv, a financial data company.

Some of those deals have become fundamental to their businesses today, including Apple's acquisition of the chip company P.A.Semi, which contributed to the company's development of its new laptop processors, and Google's acquisition of AdMob, which helped create a mobile advertising business.

''The big will get bigger and the poor will get poorer,'' said Michael Cusumano, deputy dean of the Sloan School of Management at the Massachusetts Institute of Technology. ''That's the way the network effects work.''

BETWEEN THEM - FACEBOOK - MICROSOFT - GOOGLE - APPLE AND AMAZON had nearly $300 billion in cash, excluding debt, at the end of March, according to Loup Ventures, an investment firm specializing in tech research.

The cash reserves could fund accelerated stock buybacks as share prices fall, analysts say. Doing so would increase the companies' earnings per share, deliver more value to investors and signal to the market that their firms are more valuable than Wall Street is willing to acknowledge.

The companies roared ahead during the pandemic as people sequestered at home immersed themselves in a digital world. Customer orders soared on Amazon. Closed stores shifted sales online and stepped up Google and Facebook advertising.

The last tech giant to cull its ranks during a major downturn, Microsoft is doing the opposite during the turbulent period.

Emboldened by a business that has proved more durable than that of its peers, Microsoft is sweetening salaries, expanding its investments in cloud computing and standing by a $70 billion acquisition of Activision Blizzard that it expects to unlock more sales for its video games.

The Honour and Serving of the Latest Global Operational Research on Big Tech and Market Slump. continues. The World Students Society thanks author Tripp Mickle.

With respectful dedication to the Students, Professors and Teachers of the world. See Ya all prepare and register for Great Global Elections on The World Students Society - for every subject in the world : wssciw.blogspot.com and Twitter - !E-WOW! - The Ecosystem 2011 :

Good Night and God Bless

SAM Daily Times - the Voice of the Voiceless


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