You should watch out for these companies

But the lack of chips and forecasts that Apple can hardly increase its sales with the prestigious iPhones are currently not hurting the company. Instead, the hype is being driven by the prospect that CEO Tim Cook could enter the auto business with Apple and then even compete with Tesla.

The soaring of the tech companies at the beginning of 2021 was not necessarily to be expected. The global delivery bottlenecks threatened to stifle sales growth. Regulators warned of wanting to regulate the business of online platforms, especially those of Google and Facebook, to a greater extent. Facebook was also renamed Meta for image reasons.

And finally, the tech companies made life difficult for themselves. Because Apple changed its tracking rules, it is estimated that Google, Snap, Meta and Amazon lost around ten billion dollars in advertising revenue. Meta founder Mark Zuckerberg, of all people, then denounced the market power of competitor Apple.

In fact, these burdens hardly slowed the growth of Silicon Valley corporations. Apple was also unable to deliver ten million smartphones due to the shortage of chips. But unlike the auto industry, for example, Apple and Co. have much more stable supply relationships with semiconductor manufacturers than Volkswagen and Toyota.

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The never-ending corona pandemic, on the other hand, has further spurred the business models of tech companies. Anyone who does not come to the office wants to at least communicate with the latest cell phone or tablet.

If you don’t travel, you want to at least shop properly from your living room – and Amazon delivers: In order to keep the Christmas business going in the USA, the group invested an additional four billion dollars in additional staff and increased logistics in the weeks leading up to Christmas alone.

This practically eroded the profit from the Christmas business, but continued to cement Amazon’s market power.

And regulation has hardly had any effect so far. The storm on the Capitol at the beginning of 2021 and, most recently, the statements of the whistleblower Frances Haugen have once again fueled the discussion about stricter regulation of the Facebook parent Meta. But the much-discussed break-up of the group has not yet taken place in the USA.

In Europe, the EU is at least making an attempt. An EU law to limit the market power of internet giants like Google, Facebook and Amazon is on the way. The members of the European Parliament agreed on a position on the law on digital markets in mid-December.

Among other things, this provides for better control of company takeovers, and personal advertising is also to be regulated and restricted. The existing market conditions are unlikely to affect these laws.

The big tech companies are generally confident about the year 2022. The digitization accelerated by the corona pandemic continues to play into their cards. However, a lack of chips and regulation remain the major risks – albeit very company-specific.

Meta (social media, VR)

With the renaming of the Facebook group to Meta, company founder Mark Zuckerberg succeeded in what was probably the most eye-catching strategy change of the year. With the new name, the 37-year-old wants to prepare his company for the next evolutionary stage of the Internet: the metaverse, in which meta is supposed to play an important role.

The term describes a continuous virtual online reality in which people can play video games, work or otherwise spend time together with the help of VR glasses (Virtual Reality). The idea is still only a vague vision. But Zuckerberg has announced that it will invest heavily in this vision.

Starting in 2022, Meta plans to invest ten billion US dollars annually in the development of the technologies required for this. This corresponds to about a third of the group’s net income for the year. Meta has already achieved a small success: The app from VR subsidiary Oculus was one of the most downloaded apps worldwide at Christmas 2021.

Amazon (e-commerce, cloud)

The world’s largest internet retailer felt the consequences of the pandemic with full force last year: delivery bottlenecks, a lack of staff and high investments meant that Amazon had recently slipped into the red in traditional online retail – and the group did not meet the expectations of many analysts fulfilled. Nevertheless, the company succeeded again in expanding its market power.

Goldman Sachs analyst Sheridan is therefore fundamentally convinced of the prospects. The online trading giant is its preferred US technology stock for the coming year, according to Sheridan. He sees the Seattle group well-equipped to deal with potential delivery bottlenecks.

The increasingly stable cloud business called AWS should also serve as a secure pillar, which is now generating the largest division profit despite a relatively small share of total sales. The group is increasingly focusing on security-relevant industries such as the financial sector, most recently through a cooperation with the US technology exchange Nasdaq.

Microsoft (cloud)

Microsoft is the only company that continuously competes with Apple for the honorary title of the company with the highest market value. Nevertheless, the group is always forgotten when listing the tech giants. For a long time it looked like it was getting on in years. But under CEO Satya Nadella, Microsoft suddenly shows itself to be agile and innovative again, especially in the cloud business.

Thanks to the growth of the Azure cloud platform, it was hardly noticed that Microsoft, like the competition, is suffering from a lack of chips in its hardware sales. Azure is growing at almost 50 percent a year. This is how Microsoft can reduce the gap to the market leader AWS.

But the cloud is not the only future business in which Microsoft knows how to play. Like Mark Zuckerberg, Nadella believes in the metaverse in the workplace and in the online gaming world. The range includes Hololens glasses for augmented reality and the mesh virtual reality platform. In the gaming sector, Microsoft is active with the Xbox platform and the Minecraft game with millions of users.

Alphabet (advertising, cloud)

Alphabet continues to generate the majority of its sales with the advertising business around the Google search engine, its own advertising network and the video platform Youtube. The prospects for this business are good: Google’s travel and catering industries have always been particularly good customers in this area. They are likely to recover in 2022 and spend more on advertising than they did last.

Then there is the cloud business. Alphabet cannot keep up with Microsoft and Amazon here, but it is also benefiting from the ongoing digitization of industry.

The biggest question mark behind Alphabet’s business model remains regulation. No other tech company in the US is confronted with as many serious legal proceedings as the Google parent company.

The US Department of Justice is currently preparing a second antitrust lawsuit against him, as Bloomberg reported in September. The focus is on the Group’s digital advertising business. This second lawsuit is also a sign that the investigation is now moving faster.

Previous proceedings against Big Tech have often been disappointing for the authorities and opponents. But that doesn’t mean that it will stay that way. The authorities could learn from previous procedural errors. And the ongoing disputes with regulators around the world could well afflict the group and distract it from other issues

Almost surprisingly, Democrats and Republicans agree that the power of big tech needs to shrink. With Lina Khan, the new head of the US competition and consumer protection agency Federal Trade Commission (FTC), the debate has also gained new momentum. The “Financial Times” described the prominent critic of large technology companies as “Public enemy number two of Big Tech”. The number one is known even better in Europe: It is EU Commissioner Margrethe Vestager.

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