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Can anything slow down Big Tech’s Big 4?

February 2, 2022, 5:48 PM UTC

Despite all manner of logistical, regulatory, and market headwinds, it still feels like Big Tech’s four biggest behemoths—Apple, Amazon, Alphabet, and Microsoft—just can’t be stopped.

As investors fret over the future of tech stocks headed into a tumultuous 2022, this quartet of trillion-dollar companies keeps adding to their bottom line and trophy cases.

The Big Tech giants have gone three-for-three so far in this holiday-quarter earnings season, defying skeptics who fretted about supply chain issues and customer demand concerns impacting sales. 

Following last week’s news that Apple posted record sales and Microsoft beat analysts’ revenue projections, Alphabet on Tuesday reported fourth-quarter sales of $75.3 billion, a 32% year-over-year increase. The Google and YouTube parent, which also announced it would do a 20-to-1 stock split, saw its shares jump 7% in mid-day trading Wednesday. 

Amazon is set to report earnings Thursday.

Perhaps not coincidentally, the four firms also continue to dominate Fortune’s annual rankings of the world’s most admired companies, the 2022 version of which we released Wednesday and can be seen in full here

Apple maintained its stranglehold on the list’s top spot, finishing first for the 15th consecutive year. Amazon remained forever a bridesmaid, securing a second-place finish for the sixth straight year. Microsoft held steady in third, while Alphabet trailed in seventh.

(The rankings are based on surveys sent to 3,740 executives, directors, and securities analysts. For a full methodology, click here.)

The past several months have shown that Big Tech’s top power players remain strong and swift enough to bully their way past bruising challenges.

Apple, for example, nimbly redirected precious resources to its core iPhone business amid supply shortages, boosting its year-over-year smartphone revenue by $6 billion in the most recent quarter. 

Amazon, meanwhile, invested multiple billions of dollars to break through shipping logjams and ensure minimal delivery disruption during the holiday shopping season. (We’ll see tomorrow how much that weighed on profits.)

That’s not to say that these companies don’t have PR problems. Apple got far too cozy with the human rights-violating Chinese regime. Amazon used third-party vendors’ sales data to undercut their business. Dangerous information and opinion spreads easily on Alphabet’s YouTube platform. And that’s just for starters.

But if anyone is going to slay these giants, regulators and lawmakers remain the odds-on-favorite at this point.

In the U.S., an industry group representing Apple, Amazon, and Google, among others, continues to aggressively lobby against two bills headed to the Senate floor that would curb their power in multiple ways. While there’s bipartisan support for some kind of tech antitrust legislation, the fate of both bills remains uncertain.

European lawmakers, however, are much closer to enshrining tech-related legislation through the Digital Services Act, which could reduce the clout of Apple’s App Store, Amazon’s e-commerce platform, and Google’s targeted advertising system, among other core features. The European Parliament and Council of the European Union are expected to vote on a final version of the proposal later this year.

The political assault proves that heavy is the head that wears the crown. But right now, for these four companies, it’s good to be kings.

Want to send thoughts or suggestions for Data Sheet? Drop me a line here.

Jacob Carpenter

NEWSWORTHY

Feds spy some thieves. FBI Director Christopher Wray warned this week about the scale of China’s effort to steal U.S. technology, disclosing that the agency has more than 2,000 open China-related counterintelligence investigations underway, NBC News reported Tuesday. In an interview with the network, Wray said the scope of China’s espionage apparatus “blew me away” upon taking the FBI’s top spot in 2017. He added that China’s unrivaled hacking campaign has resulted in it stealing more personal and corporate data “than every other country combined.”

Under the VR hood. Analysts expect Meta will show an increase in revenue and a drop in profits when the Facebook parent on Wednesday releases its first quarterly earnings report since announcing an aggressive pivot to the so-called metaverse, The Wall Street Journal reported. The financial records will show for the first time how much Meta spends on its Reality Labs unit, which focuses on virtual and augmented reality technology. The division is expected to account for huge losses at Meta, though CEO Mark Zuckerberg has hailed development of the technology as a key component of the company’s long-term future.

Chips keep raking it in. Shares in AMD surged 6% as of Wednesday morning after the American chip designer posted strong quarterly earnings and issued an optimistic forecast for 2022, CNBC reported. AMD recorded $4.83 billion in fourth-quarter revenue, a year-over-year increase of nearly 50%, as the company benefited from increasing consumer electronics demand and strong reviews of its latest chips. AMD executives said they’re projecting sales of $21.5 billion in 2022, about $2.2 billion more than analysts were expecting. 

Missing a friend. PayPal shares tanked Wednesday following an underwhelming earnings report that illustrated the impact of losing key client eBay, which started shifting its payment processing in-house last year, Reuters reported. PayPal’s stock price, which fell 26% in midday trading, is now half off its all-time high set in July 2021. The company fell well short of analysts’ expectations for the holiday quarter results and current-quarter projections.

FOOD FOR THOUGHT

Trust us this time. Call it the “move slowly and build things” strategy? Bloomberg reported Wednesday that Meta has launched a soft campaign to persuade legislators and thought-makers that the company is responsibly building the so-called metaverse, with no need for pesky federal regulation. The charm offensive marks a different approach for the Facebook and Instagram parent, which historically has unveiled products first and aggressively fought Washington’s reactionary regulatory efforts second.

From the article:

For now, the effort is focused on outside groups, especially free market and libertarian-leaning organizations, many of which Meta supports financially. The calls center on policy discussions, according to people who have participated, as the company tries to anticipate issues that could arise when users socialize, work, shop and play in new virtual worlds. 

It’s all part of a “soft push” to move past last year’s controversies, said Wayne Brough, a technology expert at R Street Institute, a free-market think tank. 

IN CASE YOU MISSED IT

GM declares chip crisis over—and says it’s time to let the cheap cars roll, by Christiaan Hetzner

Bitcoin and crypto assets flatline even as the February markets rally pushes higher, by Bernhard Warner

India’s richest self-made female billionaire’s advice for women? Let go of guilt and fear, by Emma Hinchliffe

Why your A.I. is only as good as your data, by Jonathan Vanian

Fancy a spin in a robotaxi? Cruise is now inviting the public to try its self-driving cars in one U.S. city, by Christiaan Hetzner

Tom Brady just retired to spend more time at his NFT company. Here’s what it does, by Marco Quiroz-Gutierrez

The teen who tracked Elon Musk’s jet is now starting a business to monitor the flights of other billionaires, by Amiah Taylor

BEFORE YOU GO

Let’s be careful out there. When moms around the world said “it’s all fun and games until someone gets hurt,” maybe they were on to something. As virtual reality headsets grow in popularity, some particularly animated users of the tech are accruing a lengthy list of bumps and bruises, The Wall Street Journal reported Tuesday. Take the Baltimore teenager who lost his balance and fractured a kneecap. Or the North Carolina Millennial who dislocated his shoulder while wrestling a virtual tiger. While nobody keeps an exact tally of VR-related wounds, a three-year-old Reddit group splendidly titled “VRtoER” has amassed about 80,000 members.

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