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How Do Big Tech Giants Make Their Billions?

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A Breakdown of Big Tech Revenue Streams

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How Do Big Tech Giants Make Their Billions?

In 2021, the Big Five tech giants—Apple, Amazon, Google (Alphabet), Meta, and Microsoft—generated a combined $1.4 trillion in revenue.

What are the sources of this revenue, and how does it breakdown?

Below, we’ll dive into the main ways that these big tech giants generate revenue, and take a look at how much their revenues have increased in recent years.

Breaking Down Big Tech’s Revenue Streams

As we’ve mentioned in previous editions of this graphic, there are two main ways that big tech companies generate revenue:

  • They either sell you a product
  • Or sell you as the product to advertisers

Apple, Microsoft, and Amazon fall into the first category—like most traditional businesses, these companies offer customers a physical (or digital) product in exchange for money. More than half of Apple’s revenue comes from iPhone sales, Azure cloud services generate almost a third of Microsoft’s total, and Amazon’s online stores account for nearly 50% of the company’s revenue.

On the other hand, Meta and Alphabet do things a bit differently. Rather than selling an actual product, these two tech giants make most of their money by selling their audience’s attention. Nearly 98% of Meta’s revenue comes from Facebook ads, and 81% of Google’s revenue comes from advertising on various Google products.

However, despite their varying ways of generating sales, these companies all have one thing in common: revenues have soared in recent years.

The Pandemic Has Sped Up Growth

Amidst rising unemployment and pandemic-induced chaos, the Big Five still managed to see a significant revenue uptick.

In 2019 (pre-pandemic), big tech’s combined revenue grew by 12%. The following year, throughout the onset of the global pandemic and the various economic challenges that came with it, big tech still increased its combined revenue by 19%.

And in the 2021 fiscal year, big tech saw a 27% growth in combined revenue, year-over-year.

CompanyRevenue (FY 2020)Revenue (FY 2021)Growth (YoY)
Apple$274.5 billion$365.8 billion33%
Amazon$386.1 billion$469.8 billion22%
Alphabet$182.5 billion$257.6 billion41%
Microsoft$143.1 billion$168.1 billion17%
Meta$86.0 billion$117.9 billion37%
Combined$1.1 trillion$1.4 trillion27%

How did these companies continue to thrive throughout economic turmoil and global chaos? It was made possible because the societal changes triggered by COVID-19 ended up driving demand for big tech’s products and services.

For example, lockdown restrictions forced people to shop online, causing e-commerce sales to escalate. Demand for laptops and cloud-based services grew as offices shut down and companies pivoted to fully remote workspaces.

Is Growth Here to Stay?

These days, COVID-19 restrictions have eased in most countries, and the world has slowly returned to normalcy.

But that doesn’t mean growth for big tech will stop. In fact, the pandemic-induced changes to our work and shopping habits will likely stick around, meaning the increased demand for big tech’s offerings could be here to stay.

Two-thirds of employees from a global survey said their company would likely make remote work a permanent option. And global e-commerce sales are expected to grow steadily over the next few years to reach $7 trillion by 2025.

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Ranked: The 20 Biggest Tech Companies by Market Cap

In total, the 20 biggest tech companies are worth over $20 trillion—nearly 18% of the stock market value globally.

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A portion of the top 20 biggest tech companies visualized as bubbles sized by market cap with Apple as the biggest.

Ranked: The 20 Biggest Tech Companies by Market Cap

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

The world’s 20 biggest tech companies are worth over $20 trillion in total. To put this in perspective, this is nearly 18% of the stock market value globally.

This graphic shows which companies top the ranks, using data from Companiesmarketcap.com.

A Closer Look at The Top 20

Market capitalization (market cap) measures what a company is worth by taking the current share price and multiplying it by the number of shares outstanding. Here are the biggest tech companies according to their market cap on June 13, 2024.

RankCompanyCountry/RegionMarket Cap
1AppleU.S.$3.3T
2MicrosoftU.S.$3.3T
3NvidiaU.S.$3.2T
4AlphabetU.S.$2.2T
5AmazonU.S.$1.9T
6MetaU.S.$1.3T
7TSMCTaiwan$897B
8BroadcomU.S.$778B
9TeslaU.S.$582B
10TencentChina$453B
11ASMLNetherlands$415B
12OracleU.S.$384B
13SamsungSouth Korea$379B
14NetflixU.S.$281B
15AMDU.S.$258B
16QualcommU.S.$243B
17SAPGermany$225B
18SalesforceU.S.$222B
19PDD Holdings (owns Pinduoduo)China$212B
20AdobeU.S.$206B

Note: PDD Holdings says its headquarters remain in Shanghai, China, and Ireland is used for legal registration for its overseas business.

 

Apple is the largest tech company at the moment, having competed with Microsoft for the top of the leaderboard for many years. The company saw its market cap soar after announcing its generative AI, Apple Intelligence. Analysts believe people will upgrade their devices over the next few years, since the new features are only available on the iPhone 15 Pro or newer.

Microsoft is in second place in the rankings, partly thanks to enthusiasm for its AI software which is already generating revenue. Rising profits also contributed to the company’s value. For the quarter ended March 31, 2024, Microsoft increased its net income by 20% compared to the same quarter last year.

Nvidia follows closely behind with the third-highest market cap, rising more than eight times higher compared to its value at the start of 2023. The company has recently announced higher profits, introduced a higher dividend, and reported that its next-generation GPU chip will start generating revenue later this year.

AI a Driver of the Biggest Tech Companies

It’s clear from the biggest tech companies that involvement in AI can contribute to investor confidence.

Among S&P 500 companies, AI has certainly become a focus topic. In fact, 199 companies cited the term “AI” during their first quarter earnings calls, the highest on record. The companies who mentioned AI the most were Meta (95 times), Nvidia (86 times), and Microsoft (74 times).

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