Will Tech Giants Climb Back to Record Stock Values Before the End of 2022?

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By Jacob Maslow

Since the pandemic hit in 2020, there has been an increase in Big Tech sales. The onsets of the pandemic saw people shift their lives online, accelerating Big Tech’s growth. Indeed, there is an increase in the demand for the hardware, e-commerce, and services that Big Tech provides. Big Tech products range from computers to gaming and other digital devices. As a result, most Big Techs have seen an increase in revenue since 2020; analysts expect the growth to slow as the pandemic-induced boom unwinds.

Come 2022; the picture will turn grim for the tech sector. The earnings growth of Big Tech is set to decrease. After years of delivering EPS growth during the pandemic, Big Tech will record a decrease in growth in the last half of 2022 as the pandemic’s disruptive effects wane.

Big Tech like Amazon has invested heavily, focusing on increasing the expenditure to capitalize on the opportunities resulting from the lockdown consumption. As a result, EPS is expected to fall before rising from 2022 to early 2023, while some Big Tech expects to record significant growth.

Moves by Big Tech to Improve New Growth in 2022

Lockdown disruption after the pandemic affected the performance of Big Tech. The Big Tech growth is forecasted to slow down in 2022. However, Big Tech companies are experimenting with new areas providing ideas on how they could improve their development. For example, Microsoft and Meta have started to charge the metaverse space. Moreover, Big Techs opt for alternatives from cryptocurrency and other digital markets to cut out mediators, making payments fierce.

As the growth of Big Tech decreases in 2022, there are prospects that there will be new catalysts that reignite the possibilities. As a result, big Techs will have to adopt and pursue new avenues. An example of the contemporary pursuit of Big Tech is the latest electric vehicle about to be unleashed. Big Tech has contributed to the opportunity of the electric car. Big Tech has been working on electric vehicles for years, while Rivian and Google possess Waymo, and Microsoft is also interested in the venture.

Expectations of Some of the Big Tech Investments in 2022

  • Apple

Apple is the best Big Tech performing company after Microsoft lost the top position. Apple is worth $2.87 trillion now, and there are prospects that Apple will hit the $3 million track if they keep up with the momentum in 2022. However, the company is forecast to record a slower growth rate in 2022 after a successful season in 2021. Advertising and payments are some moves to foster the growth rate. Lack of enough chips remains a problem in 2022; therefore, people wishing to upgrade will experience delays. Although demand won’t be a factor, especially as Apple’s 5G is gaining more traction, supply is the critical factor for making decisions on hardware sales this year. The essential future services for apple are App Store, Subscription, and streaming services. Over the short term, the consensus among analysts forecasts Apple’s Services Revenue to grow over 15% compared to a tepid 2.6% for the products.

  • Amazon

Amazon, the top eCommerce and data services giant, has generated revenues on the onset of the Covid-19 pandemic. This is due to the massive consumer shift to online shopping and the increased demand for a good number of services. After Meta, there is speculation that Amazon is facing tremendous regulatory pressure with recommendations to be broken up to allow smaller retailers to reap market benefits. Amazon has become the poorest performing compared to its peers partly because it prioritizes growth and investments to explore a new niche. Although Amazon is the Big Tech company that experienced quite a fall in 2021, most projections indicate that the company will deliver fast growth in 2022.

  • Alphabet

Unlike other Big Tech peers, Alphabet has mastered remaining out of the limelight. Since the pandemic’s start, Alphabet has shown increased demand for its services. With YouTube becoming the most popular streamlining platform globally, Alphabet’s reliance on Google Search has increased in the past few years and shows tremendous potential. There are expectations of a slow growth rate for Alphabet in the next half of the year 2022.

  • Meta

Investors are searching for information on its performance, especially with Meta’s new updates on initiatives that have the company showing interest in exciting areas. In addition, rebranding is a signal to indicate the company’s new direction. In the year 2022, Meta is recording a hit. The company is expected to deliver a growth of 38% in the year 2022 as advertising has shifted online.

  • Microsoft

Microsoft experienced an increased demand for all its products during the pandemic. As a result, the company recorded the highest revenue and earnings, with shares up over 50% in 2021. Microsoft’s cloud computing Azure continues to grow market share at the expense of other players. Still, its main competitor Amazon’s market share remains stable. Azure market share has increased and is expected to remain the fastest-growing part of Microsoft’s business in 2022.

Are government regulations Loosening Pressure to Support Big Tech?

Regulations are still the theme for many members of the Big Tech, both at home and abroad, as they continue with the attempts to loosen the strangle hood among the key markets. Among the largest Big Tech companies, Apple, Amazon, Alphabet, Meta, and Microsoft, have experienced fines and have fresh investigations launched in 2021. The regulators have been probing to identify the dealings in everything from the M&A activity to how the Big Tech companies pay tax and their method of handling the rapid increase of data and the distribution content. The investigations follow a rise in concerns on how Big Tech is becoming dominant in leveraging their positions to the disadvantage of smaller rival firms. Indeed, half of the global cloud computing is controlled by Big Tech companies.

Consequently, regulatory pressure is initiated to debate how to balance the dominance of Big Tech. Although there has been no conclusion about the final move, there are recommendations for breaking up Big Tech or raising the tax the companies are subjected to. Currently, the regulation will no doubt become tight, although the pace of change is still unclear. In addition, big Tech could face trouble if M&A decides to block deals to improve competition and prevent Big Tech from expanding its monopoly.

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