America’s digital behemoths face a huge obstacle to growth—their size
stop big tech? After a post-lockdown wobble in 2022, America’s digital giants have come roaring back. Last week Alphabet, Meta and Microsoft all reported robust results in the second quarter, following a stellar set in the first. Between January and June, the three of them together raked in $106bn of operating profits, up by $9bn from the same period last year.
Alphabet, Amazon, Apple, Meta and Microsoft lord it over American business. The five firms dominate the500 stockmarket index, collectively accounting for 9% of its sales, 16% of its net profits and 22% of its market capitalisation. Last year their capital spending of $360bn made up over a tenth of all American business investment.
Maintaining those averages in the long run is surely asking too much. Indeed, growth has already been less blistering of late. But the firms’ bosses and investors are unlikely to settle for a slowdown. If so, they will need to focus on the three main ways that companies have to grow. Could these work for big tech?
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