Is $412 billion in one quarter a Big Tech monopoly? You tell me...
Meta, Microsoft, Alphabet, Amazon, and Apple just reported earnings of more than $3.2 million a minute, and they are still growing...
Jeez, the Big Tech companies have just completed their quarterly financials, and they’re a jaw dropper.
Most reporting has been focused on the interests of high net worth investors, and those reports leave most of us mere mortals lost in the numbers.
But I want to understand more, to demystify it, and break down the explanations from Zuck, Satya, Sundar, and the like, as they justify this number, and that strategy.
I’m trying to sift the dollars from the sense, expose the landgrab, and report it through a news media lens.
So here goes.
The first fact to note is that the Big Tech companies are reporting record amounts of revenue, and they’re still growing in an economy that most would say is shrinking.
Microsoft, Apple, Amazon, Google, and Meta, announced that they earned a combined $412 billion in just 90 days.
Big Tech’s search, social, and cloud platforms, have become hoovers for sucking up mind-blowing amounts of cash worldwide.
It’s hard to keep up, so let me break it down, so you, like me, can calibrate whether this is a tech bubble, a monopoly, or a market marvel.
But whichever way you look at it, this is a Tick, Tick, Tick, Boom Market 🔥 and I worry that we’ve seen these before.
It’s also a market that’s under unprecedented scrutiny, facing antitrust break-up, attracting record fines, under attack over tax, and on the receiving end of regulatory and political vitriol.
Despite all these headwinds, they continue to make bank, upending half a century of normal market practice.
These are the earnings reports for the Big Tech titans over the past quarter. As I said, that’s just 90 days; 129,600 minutes.
Is it a monopoly? You tell me. Here we go…
Apple
Tim Tin Man Cook and his Cupertino crew have had a tough time of it recently, with falling iPhone sales, a perceived lack of innovation and a poor showing on AI.
Apple was the world’s most valuable company until Microsoft trounced it at the beginning of the year.
AAPL stock has plummeted since then, so this earnings report was important for them to show signs of a turnaround.
Stronger than projected sales provided a welcome bump, and shareholders rewarded the company in late trading.
Bloomberg reported Apple revenue was $90.8 billion for the quarter, with profit beating analysts’ predictions.
So, the report card is that Apple might be showing new signs of life, but the litmus test will be its developer conference in June.
It needs to show it has a meaningful AI revenue stream. Is it jumping deeper into bed with Google in spite of regulatory concern, or does it have a secret humdinger up its sleeve?
Apple is also headed to a US antitrust case. Its value plunged $115 billion when the announcement was made six weeks ago.
You can keep track of Apple by bookmarking this link. It updates all the time.
Below is also a reckoner so you can see how they are performing relative to their rivals.
What Apple earns per minute
$90.8 billion in revenue / 129,600 minutes = $700,000 a minute.
Is that a monopoly?
The Financial Times reported that Alphabet revenue rose 15 per cent in the first quarter to $80.5 billion, beating analysts’ expectations.
It sent Google back above the $2 trillion market cap.
It’s a return to form for a stock darling of the past two decades, but its relentless growth was dented earlier this year when it fluffed its lines on AI.
Many analysts are certain Google is too big to fail given the fact it owns the world’s data through its search dominance, and the chart above suggests that’s true.
But, and it’s a big but, Google is facing no less than three antitrust cases that could lead to a break-up of its app store, search, advertising, and mobile dominance.
My guess is that Google’s revenue tear is because it wants to extract all the super-profits it can in case it loses the antitrust case, and its monopoly is unpicked.
That’s why it’s being so aggressive with publishers, willing to risk the farm on copyright and AI, and is rolling out no click search with SGE around the world.
But if you’re an investor, Google did well this past quarter 👏
Bookmark this link to follow all my Google analysis as antitrust approaches.
Google earned $621,000 a minute this past quarter.
Is that a monopoly?
Microsoft
Microsoft’s chart is a dream, and one created by the foresight of Satya Nadella. Yum, yum.
Tech’s venerable long-stayer is back at the top of the valuation charts, leading the race on AI, and hauling market share on cloud.
AI bolstered demand for software and cloud and revenue rose 17 per cent to $61.9 billion, beating analysts’ estimates, The Wall Street Journal reported.
Microsoft reacted by telling investors it was spending billions more on infrastructure, to build a moat around its lead.
Microsoft’s the only tech platform not facing antitrust, at least not yet. Its investments in OpenAI and other AIs are currently being probed by regulators.
You can keep tabs on Microsoft’s movements by bookmarking here.
Microsoft is earning $477,632 a minute.
Is that a monopoly?
Amazon
The Financial Times reported AI fuelled sales growth in Amazon’s cloud division, as executives laid out plans to spend huge sums to support the fast-growing tech.
AWS is “now at a $100 billion annual revenue run rate” on a 38 per cent margin, CEO Andy Jassy said, with overall Amazon revenue up 13 per cent to $143.3 billion.
Scott Galloway called it right on the Pivot podcast with Kara Swisher: “Amazon is now a cloud company, with a strong retail platform, that they sell media (ads) against.
“They are one of the only platforms that can rent their AI, or enable you to train your own AI on their cloud, which means they have huge moats.
“Amazon, Google, and Microsoft, have 67 per cent share of global cloud services. This quarter was all about cloud.”
Amazon has already been told it faces a DOJ antitrust investigation in 2025.
You can track the latest developments on Amazon by bookmarking here.
Amazon beat the pack earning $1,103,395 a minute.
Is that a monopoly?
Meta
Meta reported a 27 per cent rise in revenue to $36.5 billion, but shares tumbled after Mark Zuckerberg told investors he was doubling down on spending to win on AI.
It resurfaced nightmares of his multi-billion splurge into the Metaverse, and the strongly rising stock saw a swift reverse, The Financial Times reported.
Zuck’s entire career has been up and to the right, so he believes he can only win. Most analysis after the slump was investors wondering if they should question the maestro.
But far more frightening for me than a share value drift is Zuck’s vision for artificial general intelligence, or AGI.
That’s when machines that are more intelligent than us do all the content and code. And the rest of us… ummmm, well, don’t.
Meta also faces headwinds. Its platforms are being prosecuted across America for the harms they cause to children, and young women in particular.
Meta’s about to face a legal blast from Australia after pulling out of a media bargaining deal to fund publishers.
A very real outcome is a legal requirement for them to pay, which is likely to lead them to exit news in Australia, copying their actions in Canada. Meta generates roughly $5 billion a year in Australia.
If you want to keep abreast of Mark’s Meta Magic Money Making Machine (mmmmmm), bookmark here.
Meta is earning $281,365 a minute.
Is that a monopoly?
These are all stupefying numbers. The Big Tech scions now earn more than the entire global media industry every three days.
I was asked on a radio interview earlier today whether I thought there was a bargaining imbalance. Well, yes. That would be my view. What’s yours?