Connect with us

Technology

Visualizing How Big Tech Companies Make Their Billions

Published

on

A chart showing the big tech companies by revenue, profit, and primary market.

Visualizing How Big Tech Companies Make Their Billions

First there was oil, then tobacco, then pharma. The “Big” epithet has always denoted the unique scale and power of certain industries, and today’s Big Tech companies are the perfect example.

These six tech giants—Alphabet, Amazon, Apple, Microsoft, Meta (formerly Facebook), and Nvidia—are each one of the eight most valuable companies in the world by market capitalization.

Thanks to the ubiquity of their business, they routinely pull in an annual revenue that exceeds many national GDPs. We visualize how and where Big Tech’s revenues came from, per their latest full-year SEC filings.

Big Tech Spotlight: Alphabet, Amazon, and Meta

First we look at Alphabet, Amazon, and Meta, whose financial years ended in December 2022.

Alphabet made slightly north of $280 billion in 2022, nearly 60% of that coming from monetizing Google Search and other related activities.

Their $60 billion profit is the third-highest amongst its Big Tech peers. Their net profit margin (net income divided by total revenue) stood at 21.2% for the year, or 21 cents in profit for every dollar of revenue earned.

Here’s a quick look at the numbers.

CompanyRevenueProfitNet Profit MarginRevenue Change
(YoY)
Alphabet$282.8B$60.0B21.2%10%
Amazon$514.0B$-2.7B-0.5%9%
Meta$116.6B$23.2B19.9%-1%

At $514 billion, e-commerce giant Amazon logged its highest revenue ever, beating its Big Tech peers by landslide.

However, severance payouts and a $720 million impairment charge (due to shutting some of their physical grocery stores), hurt the company’s bottom-line. Amazon posed a nearly $3 billion net loss for the year, and, consequently, a negative net profit margin (-0.53%).

Meta pulled in close to $117 billion in 2022 and turned a $23 billion profit, for a nearly 20% net margin. Meta’s slight year-on-year revenue decline (-1%) was attributed to foreign exchange movement.

Big Tech Spotlight: Apple, Microsoft, and Nvidia

Apple is an investor darling for a reason. Consider: $383 billion revenue (for financial year ending Sep. 2023) and $97 billion in profit—second-most in the world after oil giant Saudi Aramco.

Finally, Apple’s 25% net profit margin is the second-highest amongst the Big Tech companies.

Nevertheless, even Apple has less-than-stellar years on occasion. Sales for all Apple products declined year-on year, pulling revenue down 5%. The iPhone continues to be the company’s chief moneymaker, contributing 52% of total revenue.

CompanyRevenueProfitNet Profit MarginRevenue Change
(YoY)
Apple$383.3B$97.0B25.3%-5%
Microsoft$211.9B$72.4B34.1%7%
Nvidia$27.0B$4.37B15.9%Flat

Meanwhile, Microsoft earned nearly $212 billion for its financial year ending July 2023, led by gains in their cloud and server segment, which CEO Satya Nadella prioritized back in 2014.

The company’s $72 billion net income meant the company raked in 34 cents for every dollar it made, the highest profit margin in Big Tech.

Finally, chip-designer Nvidia—the newest entrant into the trillion dollar club—made about $27 billion for the financial year ending January 2023, with a $4 billion profit. Net profit margin stood at 15.9%.

However, the company’s profile amongst investors is rising rapidly, due to its critical position in the growing AI chip business. The company has already registered a more-than-four-fold profit increase in 2023 so far—even without accounting for the last four months of the year.

Click for Comments

Technology

Charting the Next Generation of Internet

In this graphic, Visual Capitalist has partnered with MSCI to explore the potential of satellite internet as the next generation of internet innovation.

Published

on

Teaser image of a bubble chart showing the large addressable market of satellite internet.

Published

on

The following content is sponsored by MSCI

Could Tomorrow’s Internet be Streamed from Space?

In 2023, 2.6 billion people could not access the internet. Today, companies worldwide are looking to innovative technology to ensure more people are online at the speed of today’s technology. 

Could satellite internet provide the solution?  

In collaboration with MSCI, we embarked on a journey to explore whether tomorrow’s internet could be streamed from space. 

Satellite Internet’s Potential Customer Base

Millions of people live in rural communities or mobile homes, and many spend much of their lives at sea or have no fixed abode. So, they cannot access the internet simply because the technology is unavailable. 

Satellite internet gives these communities access to the internet without requiring a fixed location. Consequently, the volume of people who could get online using satellite internet is significant:

AreaPotential Subscribers
Households Without Internet Access600,000,000
RVs 11,000,000
Recreational Boats8,500,000
Ships100,000
Commercial Aircraft25,000

Advances in Satellite Technology

Satellite internet is not a new concept. However, it has only recently been that roadblocks around cost and long turnaround times have been overcome.

NASA’s space shuttle, until it was retired in 2011, was the only reusable means of transporting crew and cargo into orbit. It cost over $1.5 billion and took an average of 252 days to launch and refurbish. 

In stark contrast, SpaceX’s Falcon 9 can now launch objects into orbit and maintain them at a fraction of the time and cost, less than 1% of the space shuttle’s cost.

Average Rocket Turnaround TimeAverage Launch/Refurbishment Cost
Falcon 9*21 days< $1,000,000
Space Shuttle252 days$1,500,000,000 (approximately)

Satellites are now deployed 300 miles in low Earth orbit (LEO) rather than 22,000 miles above Earth in Geostationary Orbit (GEO), previously the typical satellite deployment altitude.

What this means for the consumer is that satellite internet streamed from LEO has a latency of 40 ms, which is an optimal internet connection. Especially when compared to the 700 ms stream latency experienced with satellite internet streamed from GEO. 

What Would it Take to Build a Satellite Internet?

SpaceX, the private company that operates Starlink, currently has 4,500 satellites. However, the company believes it will require 10 times this number to provide comprehensive satellite internet coverage.

Charting the number of active satellites reveals that, despite the increasing number of active satellites, many more must be launched to create a comprehensive satellite internet. 

YearNumber of Active Satellites
20226,905
20214,800
20203,256
20192,272
20182,027
20171,778
20161,462
20151,364
20141,262
20131,187

Next-Generation Internet Innovation

Innovation is at the heart of the internet’s next generation, and the MSCI Next Generation Innovation Index exposes investors to companies that can take advantage of potentially disruptive technologies like satellite internet. 

You can gain exposure to companies advancing access to the internet with four indexes: 

  • MSCI ACWI IMI Next Generation Internet Innovation Index
  • MSCI World IMI Next Generation Internet Innovation 30 Index
  • MSCI China All Shares IMI Next Generation Internet Innovation Index
  • MSCI China A Onshore IMI Next Generation Internet Innovation Index

MSCI thematic indexes are objective, rules-based, and regularly updated to focus on specific emerging trends that could evolve.

Visual Capitalist Logo

Click here to explore the MSCI thematic indexes

You may also like

Appian-Capital

Subscribe

Continue Reading
Visualizing Asia's Water Dilemma

Subscribe

Popular