Investors Bet Big On Tech Giants’ Pandemic Power
Investors appear to betting on big-tech stocks during the coronavirus pandemic, with Microsoft, Apple, Amazon, Facebook and Google-parent Alphabet now comprising more than 20% of the value of the entire S&P 500 – even more than at the time of the dot-com boom.
Many market watchers predict the COVID19 crisis will only accelerate the power of such digital tech giants, despite analysts reducing forecasts for company quarterly earnings.
Commentators claim tech giants such as Amazon have built-up robust online fulfilment and delivery network, such that they are they positively viewed in the current storm. Such perceptions are only amplified by strong cash reserves.
Speaking to the New York Times, NYU Professor and author, Thomas Philippon, claims it’s reasonable to expect that large tech companies will emerge in an even more dominant position post-pandemic.
Philippon warns smaller businesses are more at risk of collapse in today’s crisis than during similar times in history.
The concentration of market wealth by a few large companies has been a long-term trend brewing in recent years, notably since the Global Financial Crisis in 2007-08.
Many commentators claim the conditions to weather the COVID19 pandemic are complimentary to the offerings of many digital tech giants, with businesses and consumers going online to ramp up home-office capacities (hardware and software), and indulge in home entertainment (e.g. gaming, video streaming, social media).