It’s still good to be a tech company

Tesla Inc became a trillion-dollar company, Apple Inc and Amazon.com Inc revealed some vulnerabilities, and FAANG became … MAANG? MANGA? MAGMA? It was a week of redefining the tech landscape. Let’s dive in to the details.
Mark Zuckerberg stood in front of some BBQ sauce and revealed to the world Facebook Inc’s new name: Meta Platforms Inc. The name is rooted in the digital world, or “metaverse,” that Zuckerberg dreams of creating where we can play, socialise and even run a business, all within a computer-generated virtual
environment. It sounds mildly dystopian to me, but investors seem to find it mildly lucrative, or at least unalarming.
Of course, Tae Kim notes, it’s very convenient timing. But while the name change will help get all Facebook’s bad news out of the news cycle for a few days, it’s not going to solve any existing problems.
That said, going Meta does have its long-term advantages. Parmy Olson and Ben Schott write that if people are reminded of the metaverse every time the company is mentioned, that would be a step towards owning the space — and maybe even forgetting the past. Microsoft Corp had a fab quarter, thanks to cloud computing and the return-to-office trend, with revenue totaling $45.3 billion, a jump of 22% from a year earlier. Microsoft is
in a good position, according to Tae. While many firms have had to deal with
supply-chain complications, Microsoft’s main businesses — software and services that rely on data traveling over the internet — have been relatively unscathed. Apple and Amazon, on the other hand, aren’t so lucky.
They both have large businesses that require massive scale in manufacturing physical merchandise and delivery logistics, making them vulnerable to the woes of the current environment: production bottlenecks, along with raw material and labour shortages. Last week’s earnings made that clear, and it doesn’t look like the holiday quarter is going to get any better for them.
Meanwhile, supply shortages aren’t affecting Tesla’s valuation, which soared past the $1 trillion mark on Monday. The trigger was a deal to supply 100,000 Teslas to Hertz Global Holdings Inc. Chris Bryant just feels sorry for the rest of the auto industry, who have tried and failed to rein in Tesla’s stock-market lead, some copying directly from Elon Musk. It hasn’t helped: Tesla is now worth more than the next nine most valuable listed carmakers combined. Tesla’s expected revenue this year is only likely to be $51.1 billion. That makes its entry to the trillion-dollar club feel particularly bubbly to John Authers. If you agree, and want to have a go at timing the bubble, we totally get it. It could make you a lot of money. But it’s nearly impossible to get the timing right in practice.
The good news, as John explains, is that getting out early can still be lucrative.

—Bloomberg