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The new MAGA: Tech’s big four defy pandemic to form trillion-dollar club

In February, the President said: “Four trillion-dollar companies: Apple, Amazon, Google, Microsoft. You have Made America Great Again. The trillion-dollar club.”

While their shares have surged – as have other so-called “Fang” stocks including Netflix and Facebook – most have also torn up guidance. This means investors do not know what to expect from their next results.

With earnings just a fortnight away, what is keeping these technology firms so far ahead of the market?

In previous financial crises, the dotcom bubble or the 2008 crash, tech stocks fell hard. But this time, they have thrived. “There has been a secular, underpinning trend,” says Richard Windsor, a technology analyst at Radio Free Mobile, formerly of investment bank Nomura. “Lockdown showed the start of the work-from-home trend. That has extended into the second quarter and will extend beyond the end of lockdown.”

He says that, while some predicted most office workers would be returning to work, it now appears many of these roles in the near future will stay remote.

This trend has disproportionately benefited big technology firms, as well as a number of smaller, fast-growing peers. Amazon’s Web Services business, which sells internet services to companies, is in high demand across governments and in new sectors. Microsoft’s Azure, its rival, is similarly well-placed, as are its workplace lines such as Microsoft Office and its video conferencing app Teams. Google, too, has been investing in its own cloud computing business and work-from-home apps such as Hangouts.

The tech giants helped propel Wall Street to its best quarter since 1998.

The tech giants helped propel Wall Street to its best quarter since 1998.Credit:AP

Of the four, Windsor says Apple may have the toughest results. Demand for smartphones has declined between 10 per cent and 20 per cent. However, Amazon appears well positioned. “Amazon will have the best quarter of them all,” he says. “People have continued to order online. It has not suffered in advertising like Google has, and it has a lot of exposure to cloud computing.”

On Monday, Amazon hit an all-time high share price of more than $US3,000. It is up more than 61 per cent this year. Of the other trillion-dollar firms, Microsoft is up 31 per cent, Alphabet 10 per cent and Apple 25 per cent. All have recovered their losses from the crash in March as lockdowns engulfed Europe and the US.

These rises leave Alphabet worth $US1.02 trillion, Amazon $US1.52 trillion, Microsoft $US1.6 trillion and Apple $US1.62 trillion. With a combined value of roughly $US5.7 trillion, they are valued at more than triple the FTSE 100.

Microsoft is now competing with Apple for status as the world’s most valuable company. A recent note from investment bank Jefferies argued the firm “has a portfolio of products to sustain growth in any environment, be it in the office or work from home”.


Despite the soaring valuations, Wall Street analysts have grown ever more bullish on technology stocks. Morgan Stanley recently sent a note to clients titled “Technology Eating the World”. It said: “We are in the early innings of a technology-driven, decade-long investment cycle… importantly, COVID-19 is a wake-up call to accelerate this digital transformation.”

It is not just these big four stocks booming among tech, although combined they are worth more than the next 19 firms on the S&P 500.

Zoom, the video conferencing app, is up 280 per cent this year. Netflix is up 50 per cent. Shopify, a US-listed Amazon competitor, is up 141 per cent. Tesla is now worth more than Toyota.

Telegraph, London

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