Technology
Zoom is Now Worth More Than the World’s 7 Biggest Airlines
Zoom Is Now Worth More Than The 7 Biggest Airlines
Amid the COVID-19 pandemic, many people have transitioned to working—and socializing—from home. If these trends become the new normal, certain companies may be in for a big payoff.
Popular video conferencing company, Zoom Communications, is a prime example of an organization benefiting from this transition. Today’s graphic, inspired by Lennart Dobravsky at Lufthansa Innovation Hub, is a dramatic look at how much Zoom’s valuation has shot up during this unusual period in history.
The Zoom Boom, in Perspective
As of May 15, 2020, Zoom’s market capitalization has skyrocketed to $48.8 billion, despite posting revenues of only $623 million over the past year.
What separates Zoom from its competition, and what’s led to the app’s massive surge in mainstream business culture?
Industry analysts say that business users have been drawn to the app because of its easy-to-use interface and user experience, as well as the ability to support up to 100 participants at a time. The app has also blown up among educators for use in online learning, after CEO Eric Yuan took extra steps to ensure K-12 schools could use the platform for free.
Zoom meeting participants have skyrocketed in past months, going from 10 million in December 2019 to a whopping 300 million as of April 2020.
The Airline Decline
The airline industry has been on the opposite end of fortune, suffering an unprecedented plummet in demand as international restrictions have shuttered airports:
The world’s top airlines by revenue have fallen in total value by 62% since the end of January:
| Airline | Market Cap Jan 31, 2020 | Market Cap May 15, 2020 |
|---|---|---|
| Southwest Airlines | $28.440B | $14.04B |
| Delta | $35.680B | $12.30B |
| United | $18.790B | $5.867B |
| International Airlines Group | $14.760B | $4.111B |
| Lufthansa | $7.460B | $3.873B |
| American | $11.490B | $3.886B |
| Air France | $4.681B | $2.137B |
| Total Market Cap | $121.301B | $46.214B |
Source: YCharts. All market capitalizations listed as of May 15, 2020.
With countries scrambling to contain the spread of COVID-19, many airlines have cut travel capacity, laid off workers, and chopped executive pay to try and stay afloat.
If and when regular air travel will return remains a major question mark, and even patient investors such as Warren Buffett have pulled out from airline stocks.
| Airline | % Change in Total Returns (Jan 31-May 15, 2020) |
|---|---|
| United | -72.91% |
| International Airlines Group | -72.16% |
| American | -65.76% |
| Delta | -65.39% |
| Air France | -54.34% |
| Southwest Airlines | -56.35% |
| Lufthansa | -48.08% |
Source: YCharts, as of May 15, 2020.
The world has changed for the airlines. The future is much less clear to me about how the business will turn out.
—Warren Buffett
What Does the Future Hold?
Zoom’s recent success is a product of its circumstances, but will it last? That’s a question on the mind of many investors and pundits ahead of the company’s Q1 results to be released in June.
It hasn’t been all smooth-sailing for the company—a spate of “Zoom Bombing” incidents, where uninvited people hijacked meetings, brought the app’s security measures under scrutiny. However, the company remained resilient, swiftly providing support to combat the problem.
Meanwhile, as many parts of the world begin taking measures to restart economic activity, airlines could see a cautious return to the skies—although any such recovery will surely be a “slow, long ascent”.
Correction: Changed the graphics to reflect 300 million daily active “meeting participants” as opposed to daily active users.
Technology
Ranked: America’s Largest Semiconductor Companies
This graphic visualizes the market capitalizations of America’s 15 largest semiconductor companies.
Ranking America’s Largest Semiconductor Companies
As our world moves further into an era of widespread digitization, few industries can be considered as important as semiconductors.
These components are found in almost everything we use on a daily basis, and the ability to produce them domestically has become a topic of national security. For example, in 2022 the Biden administration announced the CHIPS and Science Act, which aims to strengthen America’s position in everything from clean energy to artificial intelligence.
With this in mind, we’ve ranked the top 15 U.S. semiconductor companies by their market capitalizations.
Data and Highlights
The data we used to create this infographic is listed in the table below. Year-to-date (YTD) returns were included for additional context. Both metrics are as of May 30, 2023.
| Rank | Company | Ticker | Market Cap (USD billions) | YTD Return |
|---|---|---|---|---|
| 1 | Nvidia | NVDA | $992 | 180.2% |
| 2 | Broadcom | AVGO | $335 | 45.1% |
| 3 | AMD | AMD | $202 | 95.7% |
| 4 | Texas Instruments | TXN | $160 | 8.2% |
| 5 | Qualcomm | QCOM | $129 | 8.2% |
| 6 | Intel | INTC | $125 | 12.2% |
| 7 | Applied Materials | AMAT | $115 | 41.2% |
| 8 | Analog Devices | ADI | $89 | 9.2% |
| 9 | Lam Research | LRCX | $85 | 52.1% |
| 10 | Micron Technology | MU | $78 | 42.3% |
| 11 | Snyopsys | SNPS | $71 | 45.4% |
| 12 | KLA | KLAC | $63 | 21.8% |
| 13 | Marvell Technology Group | MRVL | $54 | 76.2% |
| 14 | Microchip Technology | MCHP | $42 | 11.2% |
| 15 | ON Semiconductor | ON | $36 | 36.3% |
At the top is Nvidia, which became America’s newest $1 trillion company on Tuesday, May 30th. Shares pulled back slightly over the day and Nvidia closed at $992 billion. Over the past decade, Nvidia has transformed from a gaming-focused graphics card producer to a global leader in AI and data center chips.
In third and sixth place are two of America’s most well known chipmakers, AMD and Intel. These longtime rivals are moving in opposite trajectories, with AMD shares climbing 770% over the past five years, and Intel shares falling 47%. One reason for this is the data center segment, in which AMD appears to be stealing market share from Intel.
Further down the list we see Applied Materials in seventh, and Lam Research in ninth. Both firms specialize in semiconductor manufacturing equipment and thus play an important role in the industry’s supply chain.
Trade War Impacts
As tensions between the U.S. and China escalate, chipmakers are becoming increasingly entangled in geopolitical conflict.
In October 2022, the Biden administration introduced new export controls aimed at blocking China’s access to semiconductors produced with U.S. equipment. This impacted several companies in our top 15 list, including Lam Research and Applied Materials.
Shortly after the export controls were announced, Lam Research said it expected to lose upwards of $2.5 billion in annual revenues.
We lost some very profitable customers in the China region, and that’s going to persist, obviously.
– Doug Bettinger, CFO, Lam Research
In response, China announced in May 2023 that it would no longer allow America’s largest memory chipmaker, Micron, to sell its products to “critical national infrastructure operators”.
This is not the first time Micron has been involved in a controversy with China. In 2018, the firm alleged that Fujian Jinhua Integrated Circuit, a Chinese state-owned company, had solicited a Micron employee to steal specifications for memory chips. The U.S. Department of Commerce imposed export restrictions on Fujian Jinhua as a result.
Chipmakers on both sides of the Pacific will be closely watching as competition between these two countries heats up.
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