Name: The Most Profitable Company on This Year’s Fortune 500 List
Uploaded: 2016-06-09
Duration: 6 min 22 s
Description: But it might've hit its peak

[ SOUND ] Obviously, another huge outlier on this list was Apple. Number three, its highest ever, and I think that the most profitable company on the list, right? By far. Easily the most profitable. Is it going to continue? Ryan, what do you think? Well, you covered tech, what do you think? I don't know. The thing is, their ascent has been relentless. 53 billion dollars in profits this year. Way above everybody else. That's a lot of iPhones, but they keep raising the bar and they have to. What's the iPhone 7 going to do? Is there going to be an Apple Car? I don't know, but they are going to keep reinventing that magic .>> I'd be surprised if it did continue. If you look at what's happening, the iPhone sales that turned down, and the iPhone sales. Unless they come up with some other big thing. Right. Unless the watch takes off much more than it did in the last year, or some other device returns them to the kind of central status that they've had. Right now, it looks like they've, they may have hit their peak on the Fortune 500 level. Do you think it's a product thing or do you think it's just a, can China help Tim Cook, for example? I mean some of it is just the natural cycle of industries right? Trees don't grow to the sky. At some point things stop. Now the other one that's moving steadily up that's worth keeping an eye on is Amazon. It cracked the top 20 this year For the first time Yeah first time. So I think you're gonna see more from Amazon but. Apple got to number three, are they gonna surpass, what do you think? You think they'll surpass Exxon or Walmart? Yeah, I mean, it's hard to say what's gonna happen with oil. If oil prices edge back up, they're showing some signs of getting stronger, that could boost Exxon. But you mentioned Amazon, I mean I think that's a really interesting thing to watch. Walmart's number one, they're way, way, way ahead in revenues. Amazon is the fastest company to reach $ 100 billion in revenues ever. Walmart's trying to compete with them digitally. The market's valuing Amazon more than Walmart right now. Amazon has two really exciting growth businesses under its tent. One, you know very well, is the Amazon cloud services, which is powering a lot of the Transformation of all the Fortune 500 companies. So that's gonna keep going. And the other one is this Amazon Echo, the voice. Some people, Mary Meeker in her state of the internet slide show said that voice will become the interface for computing. If Amazon can retain a lead position, that's gonna be very big Right, the argument there is that you can build this cloud services platform and then all these other services you can pile on top of it, artificial intelligence, machine learning, and so forth. We had another question come in from Facebook. Somebody asked what are the factors going on in other countries, like China- Doing to the list. So what is the Chinese economy? How is that effecting the overall Fortune 500 list, which of course is for US companies. That's part of the energy story. Yeah, it definitely is. And you see it in other commodities. Yeah, for sure. I mean, China has been a huge part of the manufacturing realignment globally and really has driven the commodities boom and there has been a huge Correction in commodities the last couple years. And oils were the most visible part of that. I think all these CEOs, I don't know the exact percentage but a high percentage of the 500 now, they do business globally. So they're not just watching the U. S. market. It's good if the U. S. economy stays healthy, but they have to keep a close eye on China. I mean, Walmart They're betting big on China, for instance. Right. Okay, one more question from Facebook. Somebody says, Apple has $ 53 billion in profits but not doing the type of things for the world that Google is, and of course, we're really talking about Alphabet, Google's parent company. You think that's the case? Well, Alphabet is certainly a very aspirational company. But they're only good things for the world if they actually work, so I think the jury is a little bit out on that question. We We don't know. Let me give you one piece of data that's kind of interesting on the Apple front. Last year when we surveyed CEOs, we said, other than yourself, who's the CEO you most admire? Tim Cook was at the top of the list. This year, it's not Tim Cook, it was Jeff Bezos by a mile. Interesting. Interesting. Lastly were there any surprises on the list to you. Either of you gentleman. Alan, was there a surprise for you? Well, you know the list better than I do. There must have been something that surprised you. Surprises I mean like it's a surprise that Mircrosoft made the top 25 for the first time when you hear that you're like whoa they weren't in it but the text story is just Facebook made a huge jump again this year they only joined the 500 a few years ago now they're number 157 they jumped 85 spots they have 18 billion dollars in revenue we're living our lives through our phones on Facebook. You know, Netflix, we're not on Facebook, we're on Netflix. They made a huge jump so the tech story is really powerful. It keeps going, that can help. And I promised that I wouldn't ask one more Facebook question but one did come in and it's a good one. Why not. Is the Fortune 500 still innovative or is the innovation happening elsewhere among the global 500. Allen, what do you think? I think there's no question that the Fortune 500 is an interesting thing if you think about what Joseph Schumpeter talked about as creative destruction, how that works. You have to have start- ups, you have to have people nipping at the heels, you have to have people creating I think it was Andy Grove who said only the paranoid survive. Right. Well, someone has to create the paranoia. You need somebody knocking at the door, and the innovative start- ups that we have in this country are doing that, but what's fascinating to me is how that's changing the behavior of the big companies. You hear so much talk now, in this country, amongst CEOs, about the need to, we have to disrupt ourselves. We have to We have to figure this out, because if we don't figure it out, some Uber's gonna come along and take our business away. So while startups are a critical part of the equation, at the end of the day a lot of the innovation does end up in big companies. The other answer, the simple answer is, yes. Because you know why? The Fortune 500 is a scorecard of achieving success and scale, and if the companies don't innovate They fall away. The new companies come onto the list like Facebook. And they scale faster than they ever have before. So when you have an Apple in number three or an Amazon in the top twenty or Facebook rocketing up the chart, you know it's only a matter of time before we see Uber and Airbnb on the list. Absolutely.