Dive Brief:
- The five most valuable public companies — Apple, Alphabet, Microsoft, Amazon and Facebook — gained a combined $181 billion in market value last Friday, as reported by CNBC.
- The gains were spurred by better-than-expected earnings reports from Alphabet, Amazon and Microsoft.
- Facebook and Apple are queued up to report earnings at the end of this week. Both are expected to announce favorable results.
Dive Insight:
Based on the strong performance by the big five tech companies, the S&P 500 and Nasdaq had record closes last Friday. For marketers, the numbers are noteworthy because they suggest the series of mishaps which has hit digital marketing this year — including murky and even wrong metrics, fake news and marked inefficiencies in the media supply chain — has had a minimal, if any, impact on the bottom line of the major digital platforms, in part because their influence is now felt across such a wide swath of industries and consumer touch points, driving the strong earnings performances. In turn, investors are optimistic about the future growth potential of the tech giants even as major brands like P&G, Unilever and others reduce their digital ad budgets. In contrast, the major ad holding groups — which have been struggling for years to respond to the growth in digital marketing — have all recently reported shrinking profits and are being viewed as potential takeover targets
Each of the tech giants fills a specific niche. Google parent company Alphabet and Facebook are in direct competition as both are dependent on ad revenue although Amazon is nipping at their heels. Last week Alphabet announced its Q3 earnings, besting Wall Street’s expectations and illustrating the growing role that video, voice and shopping are having for the company. Last week, Amazon and Microsoft also reported better than expected earnings. Amazon makes most of its money through its Amazon Web Services cloud computing, but eMarketer recently forecasted it will hit $1.65 billion in ad revenue this year.
Apple leans more heavily on hardware with an emphasis on its iPhone releases and Microsoft’s main play is its hold over enterprise software.
Facebook and Apple report their earnings this week and are expected to put in strong performances as well.
