On November 8, TechCrunch, a foreign technology blogger, wrote that in the most recent quarter, the five major technology giants Apple, Google, Amazon, Facebook, and Microsoft have achieved brilliant financial results, both in terms of revenue and profitability. expected. However, are the days of the giants so moist that it is a good thing for other companies, including startups?
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At the end of October, three of the top five technology companies in the United States reported quarterly earnings that exceeded market expectations.
The financial reports of Amazon, Microsoft, and Alphabet are all quite eye-catching. Their revenue and profit exceeded analysts' expectations. These companies have achieved outstanding results in their own unique ways.
After that, Facebook and Apple also successively issued financial reports, continuing the momentum of both the revenues of leading US technology industry leading groups exceeding market expectations.
The combined market capitalization of these five companies, collectively referred to as the Big Five, is now not just a $3 trillion breakthrough in the previous period, but is about $3.3 trillion, which is 10% higher than the previous milestone.
This is how it happened? First of all, let's take a look at what the top three giants have achieved recently and then analyze the operation of the latter two companies.
This good time for the technology industry will not last forever, but in the third quarter of 2017, these dominant platform companies did indeed enjoy a very moist environment.
Microsoft, Amazon and Alphabet
Several of the top five giants announced their financial reports first in the third quarter.
Microsoft achieved revenue of 24.5 billion U.S. dollars, exceeding the market forecast of 23.56 billion U.S. dollars; EPS of 0.84 U.S. dollars, exceeding the market forecast of 0.72 U.S. dollars. At the same time, the company's cloud computing business reached its revenue target in advance. The company's "Commercial Cloud" ARR (annual recurring income) reached the $20 billion mark, which means that its cloud computing services generated at least $1.66 billion in revenue in the final month of the third quarter. . The company had previously promised to reach a $20 billion ARR threshold at some point in the coming quarters. The cloud computing business is very important to Microsoft because it is the company's most predictable and continuous income. The business model of this business is exactly the opposite of the one-time license sales model of the Windows operating system.
Amazon achieved revenue of 43.7 billion U.S. dollars, exceeding the market forecast of 42.14 billion U.S. dollars; earnings per share of 0.52 U.S. dollars, exceeding market expectations of 0.03 U.S. dollars. This performance reflects the two things of the Seattle Group, which is a collector, entertainment and cloud service: its growth has not slowed down (in terms of percentage); it can continue to expand while achieving profitability. The company's revenue growth rate was 29% in the third quarter of last year, and its growth rate in the most recent quarter increased to 34%. Moreover, the second growth figure was obtained on a higher base. Of course, the acquisition of Whole Foods did not have a negative impact, but Amazon did a great job of accelerating growth while earning more profits, which is arguably a great achievement in business.
Alphabet recorded revenue of 27.8 billion U.S. dollars, exceeding market expectations of 27.2 billion U.S. dollars; earnings per share of 9.57 U.S. dollars, exceeding market expectations of 8.33 U.S. dollars. How did it achieve such a dazzling performance? In the third quarter, Alphabet’s subsidiary, Google, stopped its sequential decline in revenue per click. In short, during the quarter, the cost per click for Google ads increased compared to the previous quarter. On a year-on-year basis, this figure is still declining, but for Google, which has seen rising ad traffic in recent days, but the price of clicks continues to decline, the change is worth noting. Google sold more ads and the sale price increased by a full percentage point from the previous quarter. This change can not be underestimated.
These companies have different paths beyond market expectations, but all have achieved outstanding results, at least in excess of analyst expectations. Of course, it is no accident that the Nasdaq Composite Index has exceeded 6,000 points.
However, after these three giants have announced their achievements one after another, whether Apple and Facebook will be able to achieve comparable performances with them will become unknown.
Apple and Facebook
Apple and Facebook relayed the top three giants and continued their strong performance. Both Apple and Facebook surpassed analysts' average expectations, and the top five giants all scored in the third quarter.
Apple realized revenue of 52.6 billion U.S. dollars, exceeding the market forecast of 50.7 billion U.S. dollars; earnings per share of 2.07 U.S. dollars, exceeding market expectations of 1.87 U.S. dollars. The company’s three major consumer electronics lines, the iPhone, iPad, and Mac, all grew during the quarter, with service revenues reaching US$8.5 billion. With the third-quarter earnings that exceeded market expectations and two new mobile phones entering the crucial holiday shopping season, Apple can say that momentum is strong. Investors also agreed. The company’s share price reached US$174.67 on Monday, and its market value (according to Google Finance’s data) reached US$902.2 billion, only a stone's throw away from US$1 trillion.
In the end, the youngest Facebook among the five giants achieved 47% revenue growth in the most recent quarter, which was a drop from the 59% in the same period last year. However, its revenue reached 10.3 billion U.S. dollars, still exceeding market expectations of 9.84 billion U.S. dollars; earnings per share also reached 1.59 U.S. dollars, far exceeding the average analyst estimate of 1.28 U.S. dollars. The company is also continuing to expand its user base and revenue per user. However, Facebook said that the upcoming action aimed at helping its platform to avoid being weaponized by hostile countries will have an adverse impact on future profits.
Although this last sentence does not sound like a topic, it highlights something that we tend to forget. Ie how large these companies actually are: Facebook has nearly 1.4 billion daily active users. Google is the main access to information in most parts of the world. Amazon wants to control all of your consumer shopping activities. Microsoft is global To consolidate its dominance of SaaS (software as a service) products for homes and offices, Apple’s profits are staggering and its wealth can be an enemy.
But are these giants living so well and are good things for other companies? Maybe not.
How about a startup?
TechCrunch recently proposed the "Peak Startup" startup company to the top, pointed out that the wave of technological change driven by the vibrant entrepreneurial circle has faded. Of course, this is not to say that this wave will not be revisited, but let’s take a look at whether the following statement is correct:
“We now live in a new world. It prefers big companies, not small ones. The balance has begun to return. Big companies and executives will dominate the next decade, not startups and entrepreneurs; today The graduates are likely to work for Mark Zuckerberg instead of being able to follow his own initiative.â€
In the good times, the largest technology companies can continue to consolidate their dominance, accumulate huge cash reserves, and smaller companies with subversive capabilities can also access the most abundant capital since the Internet boom. If the giants can do it during the good times for everyone, what will they do when the feast turns into famine?
At the end of the boom cycle (at the end of the day), think about how it will affect the current state of harmony. It is not difficult to imagine that when a bad time occurs, large companies with huge cash reserves will also be able to live well. At the same time, those startup companies that are still in the private sector and have not yet achieved profitability are worried about the dilemma of diminishing interest from technology investors. (Lebang)
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