This is an opinion.
- The combined market value of Facebook, Amazon, Apple, and Google stock is equivalent to nearly one-quarter of U.S. GDP.
- The CEOs of the four firms will testify before Congress later this month.
- Legislators are looking into antitrust issues raised against the tech giants.
Nothing exposes the sheer economic dominance of U.S. tech stocks like Facebook and Amazon better than the upcoming congressional hearing featuring four Silicon Valley CEOs.
In one sitting, the U.S. House Judiciary Committee will hear from Facebook’s Mark Zuckerberg, Amazon’s Jeff Bezos, Apple’s Tim Cook, and Google’s Sundar Pichai.
All four men agreed to appear before the House voluntarily in late July.
This House Antitrust Hearing Could Get Awkward for Facebook and Friends
The antitrust hearing comes at an awkward time for the four titanic tech stocks. Their combined market caps are equivalent to nearly a quarter of the U.S. economy’s annual output:
- Apple: $1.58 trillion
- Amazon: $1.44 trillion
- Google (Alphabet): $983 billion
- Facebook: $677 billion
That adds up to $4.68 trillion, or 21.8% of annual GDP ($21.43 trillion as of 2019).
While that’s fantastic for longtime investors, it’s going to make it harder for the Silicon Valley CEOs to argue that their leviathan companies shouldn’t be broken up.
The stock market values these companies so highly precisely because of their monopolistic hold on the tech industry. That’s more true now than ever.
Tech Stock Leviathans Swell as Pandemic Pummels Economy
During the pandemic, their dominance has grown – not shrunk.
While the lockdown has destroyed lives and livelihoods. it’s been a blessing for the “stay-at-home” stocks that populate Silicon Valley.
Year-to-date, 15 traditional retailers have filed for bankruptcy. Many more could follow.
Bankruptcy is not a concern for Amazon, Apple, Facebook, or Google.
Amazon recorded a net sales jump of 26% in the first quarter, and its expansion plans have proceeded unhindered. In June, Amazon acquired autonomous car startup Zoox for over $1.2 billion.
The pandemic hasn’t stopped the lavish spending plans of Facebook, Apple, or Google either. In April, Facebook invested $5.7 billion for a 9.99% stake in Reliance Jio Platforms, an India-based telecom network.
Last week, Apple acquired enterprise software firm Fleetsmith. Alphabet purchased augmented reality smartglasses startup North just days later.
Amazon, Apple, Google, and Facebook Put Themselves on the Hot Seat
As millions lost their jobs and the U.S. economy took a nosedive, these four Silicon Valley stocks swiftly recovered. Excluding Google-parent Alphabet, they’ve all shot to new records.
Those optics could spark some uncomfortable questions for Bezos, Cook, Pichai, and Zuckerberg when they face the House this month.
The CEOs reportedly decided to appear jointly before the U.S. House Judiciary Committee to avoid being individually “singled out for intense scrutiny.”
That strategy may backfire.
Collusion like this between four companies worth nearly a quarter of U.S. GDP is why the antitrust subcommittee exists.
Disclaimer: This article represents the author’s opinion and should not be considered investment or trading advice from CCN.com. Unless otherwise noted, the author has no position in any of the stocks mentioned.