A handful of big tech companies have ruled the roost for some time now. But not everyone believes this will go on forever. After all, empires all fall eventually.
In this article, we’ll offer a rundown of the current top five firms. We’ll also take a look at who the analysts at Invezz believe are waiting in the wings, hoping to capitalise when their time comes.
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Who are the big five tech companies?
The current top five technology companies are household names, so it’s likely you’ll have heard of them all:
- Apple (AAPL)
- Microsoft (MSFT)
- Amazon (AMZN)
- Alphabet (GOOGL) – Google’s parent company
- Facebook (FB)
But these companies haven’t always been the biggest companies. It’s only relatively recently that these businesses ousted names like General Electric and Exxon Mobil from the top spots of the S&P 500 index. In fact, during the 2000s, none of these companies even ranked among the top five in the S&P 500.
The current market capitalisation of this big five combined is $7.7 trillion. To put that in perspective, the whole FTSE 100 only has a market cap of around $1.7 trillion!
Why could a tech takeover happen?
Times change. As much as businesses try to stay relevant, the world moves on. Priorities shift and the things we spend our money on evolves over time.
Although this big five are recording soaring profits right now, this may not always be the case. Over the next decade, antitrust and tax crackdowns along with societal shifts could lead to a decline in the power of these companies.
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Who might take over from the big five tech companies?
Analysts at Invezz believe there are some interesting businesses out there that won’t be playing understudy for much longer.
Let’s take a look at the industries and companies they believe will upset the current status quo.
1. Taiwan Semiconductor Manufacturing Company (TSM)
This Taiwanese chipmaker has a current valuation of around $620 billion. Chipmakers have been described as the ‘backbone of the economy’. The company builds the hardware that supports our tech-heavy lifestyles.
2. Salesforce (CRM)
Although Jeff Bezos’ Amazon currently wears the cloud computing crown, this could change. Salesforce is a fast-growing competitor that’s looking to make big moves over the next decade to compete with the cloud offerings from the big tech top dogs.
3. Tesla (TSLA)
You’re probably already familiar with Elon Musk’s electric vehicle superstar. However, in comparison to other car businesses, Tesla is actually pretty small in terms of market share and manufacturing capabilities. But transport is an industry that’s already in the throes of disruption, and Tesla is poised perfectly to pounce and become the king of travel.
4. Tencent Holdings Limited (TCEHY)
Chinese stocks have had a turbulent time over the years but the words ‘tech’ and ‘China’ are becoming synonymous. Tencent is just one of the huge Chinese technology companies looking to spread its wings and achieve global success.
5. Brookfield Renewable Partners (BEP)
Green energy transformation is another rising industry. Renewable energy hit record growth in 2020. It’s an area that’s set for more growth over the coming years. Brookfield owns and operates a portfolio of renewable power facilities across the Americas, and it’s in a good position to help with the green transition.
How do I invest in big tech companies?
You can invest using a share dealing account and go for the current big players. Or you can try and find the next up-and-coming companies that may have more growth ahead.
Another good option is investing in something like an investment trust that focuses on technology. This way you can get expert analysts to do the hard work and research for you.
Just remember that the value of investments can go up or down. Also, note that investing in high-growth technology companies can be very volatile compared with other assets and investments.
