Technology
The Shrinking Trillion Dollar Market Cap Club
The Shrinking Trillion Dollar Club
Aggressive tightening from the Federal Reserve has caused tech stocks to plummet back to Earth in 2022, and this has shaken up the membership of the trillion dollar market cap club.
Here are the four current members of this exclusive club:
| Company | Sector | Date Market Cap Hit $1T | Market Cap (Nov 3, 2022) |
|---|---|---|---|
| Apple (AAPL) | Tech | Aug 2, 2018 | $2.21 trillion |
| Aramco (2222) | Energy | Dec 11, 2019 | $2.01 trillion |
| Microsoft (MSFT) | Tech | Apr 25, 2019 | $1.60 trillion |
| Alphabet (GOOGL) | Tech | Jan 16, 2020 | $1.08 trillion |
Apple, Microsoft, and Aramco are all still well above the $1 trillion mark for now, but Alphabet’s trajectory could take it out of this list if circumstances don’t change soon. Google has indicated that the decrease in crypto advertising has had a big impact on revenue, and ad budgets continue to be slashed as economic uncertainty continues.
Here are the three former members who have seen their market cap dip back below $1 trillion:
| Company | Sector | Date Market Cap Hit $1T | Market Cap (Nov 3, 2022) |
|---|---|---|---|
| Amazon (AMZN) | Tech/Retail | Sep 4, 2018 | $911 billion |
| Tesla (TSLA) | Automotive | Oct 25, 2021 | $675 billion |
| Meta (META) | Tech | Jun 28, 2021 | $236 billion |
Amazon recently became the latest company to fall below the 10-digit threshold. In response to a poorly received earnings report and forecasts for lighter spending this upcoming holiday season, the ecommerce giant has paused corporate hiring for the foreseeable future.
Though Tesla’s valuation has dipped in recent months, Elon Musk remains bullish on Tesla’s prospects, stating the company could eventually be “worth more than Apple and Saudi Aramco combined”. To his credit, Tesla reported record revenues last month.
Diverging Fortunes
Though Apple is down nearly 20% from its peak, the company has faired better than its tech giant peers. In fact, Apple is now worth as much as Amazon, Meta, and Alphabet combined.
Meta, on the other hand, isn’t just going through tough times, it’s the worst performer in the entire S&P 500 this year so far.
Investors are bearish on Mark Zuckerberg’s expensive leap of faith that is the “metaverse” – a virtual reality world that people access via headsets (e.g. Meta Quest). It’s too early to tell whether Meta is on the forefront of the next digital revolution, or embarking on one of the most expensive tech flops in history.
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.
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:
| Area | Potential Subscribers |
|---|---|
| Households Without Internet Access | 600,000,000 |
| RVs | 11,000,000 |
| Recreational Boats | 8,500,000 |
| Ships | 100,000 |
| Commercial Aircraft | 25,000 |
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 Time | Average Launch/Refurbishment Cost | |
|---|---|---|
| Falcon 9* | 21 days | < $1,000,000 |
| Space Shuttle | 252 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.
| Year | Number of Active Satellites |
|---|---|
| 2022 | 6,905 |
| 2021 | 4,800 |
| 2020 | 3,256 |
| 2019 | 2,272 |
| 2018 | 2,027 |
| 2017 | 1,778 |
| 2016 | 1,462 |
| 2015 | 1,364 |
| 2014 | 1,262 |
| 2013 | 1,187 |
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.
Click here to explore the MSCI thematic indexes
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