Less than four years ago, when Apple’s market price reached $ 1tn, it became like a very high point in the price range. So who would have thought that, in the last days of 2021, the company that redefined consumer technology would already be around $ 3tn?
This will come down as a well-known period in the technical economy. A larger global market, aided by the financial crisis, has been hit by a pandemic that has forced controversy into digital services.
Profits from 2021 are not evenly distributed. Some corporate corners (such as ecommerce) have stabilized after 2020, while other technical stars that were identified early in the epidemic (think Zoom and Peloton) have fallen sharply. But, in hindsight, the rise in technology, and the innumerable profits seen by large corporations in particular, have continued to strengthen the larger market.
Whether it will last until 2022 is another question. The changes that have made digital an important part of the financial system still exist, and regulators have done nothing to remove the most powerful technological platforms. But the immediate tide of support for a recent technical conference is dwindling, with several hurricanes making the coming year uncertain.
Twelve months ago, the top five companies – Apple, Microsoft, Google, Amazon and Facebook (now Meta) – were looking forward to a year when their total revenue was expected to increase by 13 percent. Something similar is expected in 2022. Things in 2021, have improved: by the end of next month, the economic growth of five companies is expected to hit 27 percent. The rise in digital advertising, the need for new tools, and the increase in revenue over the cloud and other digital services became more powerful than previously thought.
This excellent performance has enhanced the Big Tech conference. The group added $ 2.7tn to the market this year, due to a 36 percent rise. This is not the same as the 55 percent epidemic last year, but it is still up 30 percent in the S&P 500.
Such growth and decline in the stock market make it difficult to cope with market and economic pressures. The low cost and the good financial system that accompanied it were technical assistance. On the other hand, it brought money out of the market and raised the price; elsewhere, it produced lower yields that reduced the discounted prices that were used to determine future profits. As prices rise, this undermines the numbers of emerging companies whose good years are ahead.
The question now is whether many of these are already appearing on the market. Expectations of inflation were eroded by about a quarter of a quarter from the prices of high-end software groups after the beginning of November, before a slight explosion in the second half of December.
Many segments of the tech industry are also entering a period of slow growth as annual comparisons become increasingly difficult. The increase in ecommerce over the past year has seen online sales in the US jump 38 percent in the last quarter. By comparison, this year’s growth should be about doubled.
At the same time, the amount of demand that is being sought also hinders enlightenment. How have consumer digital systems changed and can revert to the old ways of working and playing if the epidemic subsides?
Companies that have increased their digital assets seem unlikely to return. But if they can bring in technology that is already designed to solve the problem, it could cost the future money. In the aftermath of a number of operational challenges during a pandemic, companies may also feel that there are a number of changes that their organizations can address at the same time, leading to delays in their digital transformation plans.
That being said, pagan practices seem as strong as ever. The plague has just highlighted the need for change in the business environment. Cloud computing has just begun to consume more and more IT resources, while ecommerce only accounts for about 15 percent of US revenue.
All of this leaves much to be desired in the long run. But after recent gains and simultaneous appearances seem uncertain, another well-known year of professional stocks is hard to come by.
richard.waters@ft.com
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