Home » Gabor Steingart: 5 ways you can benefit from the miracle of the global economy

Gabor Steingart: 5 ways you can benefit from the miracle of the global economy

by admin
Gabor Steingart: 5 ways you can benefit from the miracle of the global economy

Guest article by Gabor Steingart: Five ways you can benefit from the miracle of the global economy

Email Share More Twitter Print Feedback Report an error

Spotted an Error?

Please mark the relevant words in the text. With just two clicks you can report the error to the editorial team.

There is no genetic engineering in the plant

But don’t worry: they are genetically modified

The dominant words in the German media are war, inflation and economic downturn. Enriched with the words budget hole and skills shortage, the result is a picture of the end of the world painted with a rough brush. The favorite color of German journalism is gray.

If you need a mood booster, look to America. Because on the west coast there, between Palo Alto and Seattle, a global economic miracle is taking place in which we Germans can also participate. Because the stock market, which in a sense provides the stage for this festival of many individual miracles, is accessible to everyone. Thanks to the Internet, Wall Street is right around the corner from Husum, Herne and Berchtesgaden.

Anyone who has not forgotten how to be amazed can only rub their eyes at this burst of vitality that we experience again and again in Silicon Valley and now again. The combined market capitalization of the leading technology giants – Apple, Microsoft, Amazon, Alphabet and Nvidia – reaches an impressive ten trillion dollars.

This value exceeds the total capital of all 40 companies in the DAX by 6 times. The German gross domestic product is exceeded by more than 100 percent. Based on the results of the past summer quarter alone, the profits of the DAX 40 companies exceed the Big Five by a factor of four. For comparison: Microsoft makes as much profit in 40 days as SAP makes in a year. Alphabet generated as much profit in the past 12 months as Bertelsmann – based on consolidated earnings for 2022 – in 66 years.

In Germany there are regular warnings about the bursting of the technology bubble or the end of the hype. But none of this has happened so far. On the contrary: success feeds success. These US companies are so large and so influential in their respective business areas that they are not the plaything of the markets, but conversely the markets have become the plaything of these giants.

See also  Not all guadua cutting is illegal

A new driver of profit and share price development is the breakthrough in artificial intelligence. With their armies of researchers and developers and gigantic cash deposits, these giants are entering a battle that Germany lost before it began. Here are the top 5 of this global economic miracle.

#1 Apple

In June 2023, Apple surpassed the valuation of three trillion US dollars on the stock market, equivalent to France’s entire gross domestic product in 2022. Since CEO Tim Cook took the helm in August 2011, the stock price has risen nearly 1,400 percent and Apple has consistently shown high net sales returns of over 20 percent.

The company relies on financial intelligence by purchasing $606.5 billion of its own shares over the past ten years, reducing its total holdings by 38 percent and effectively managing its capital structure.

Research and development spending rose 14 percent year-on-year to a record $29.9 billion. With pure current assets, i.e. basically liquid assets, of $143.5 billion, Apple is in a strong position – also for possible takeovers.

#2 Microsoft

Under the leadership of CEO Satya Nadella, Microsoft has undergone a breathtaking transformation. Once decried as sluggish and uninnovative, Microsoft shares have experienced a spectacular rise of more than 900 percent under Nadella since he took office in February 2014.

The company is currently at an all-time high of around $377. Nadella not only drove financial success, but also developed the company’s profile from a simple software seller to a dynamic service company.

The investment in OpenAI in 2019 meant that the AI ​​company is now seamlessly integrated into the Microsoft Group and continues to cause a sensation there. In the most recent quarter, Microsoft reported a 12 percent increase in revenue and 27 percent profit growth to $22.3 billion. This means: Even in its 48th year of existence, the company still has all the characteristics of a startup.

See also  embankments, roads, landslides, urgent interventions to be carried out for 1.9 billion euros — Emilia-Romagna Region

#3 Alphabet

Alphabet, the parent company of Google, recently presented quarterly figures with a profit increase of over 40 percent to just under $20 billion compared to the same quarter last year. This performance from CEO Sundar Pichai highlights the dominant position as the world‘s largest search engine and shows the enormous potential of the data collected.

The advertising and cloud solutions business areas, which make a significant contribution to the positive result, are developing particularly dynamically. Share buybacks totaling $208 billion over the past ten years have also reduced the total number of freely sold shares by 46.4 percent. The implementation of another $70 billion buyback program – which is currently underway – further strengthens this price development.

But the fundamental data, where real business is done with real customers, also looks brilliant: Alphabet presents net sales returns of over 20 percent. Sales have increased more than fivefold in a decade, and profits have even increased almost sixfold.

Alphabet Inc. (A) (formerly Google)

#4 Amazon

In 2022, Amazon achieved sales of $514 billion. This corresponds to almost 75 percent of the sales of the entire German retail sector, which totaled 632 billion euros in 2022.

Amazon traditionally places less value on quick profits and instead focuses on investments in the future. In recent years, the company has invested more in research than any of its competitors and has channeled significant resources into the further development of its cloud computing division, the voice assistant Alexa and the innovative project of supermarkets that are designed to operate without cash registers and staff.

This strategic realignment is clearly reflected in the 76 percent increase in Amazon shares this year, underscoring not only its current performance but also investor confidence in the company’s long-term prospects.

#5 Nvidia

Nvidia, the leading semiconductor specialist, has emerged as the most exciting bet among the five global technology stocks. After a temporary price decline in 2022, the Nvidia price has almost tripled since the beginning of the year.

See also  The presidium of the sixth party congress of the city held its first meeting. Chen Miner attended and delivered a speech_Chongqing Municipal People's Government Network

The company reported an impressive net profit of $9.8 billion when it released its latest quarterly results. The increase of 1,200 percent compared to the previous year underlines the company’s performance. Nvidia is thus growing into its high valuation. While the first two quarters were still subdued, the company developed its full potential in the AI ​​boom summer.

Nvidia is on track to hit analysts’ forecasts of $16 billion in profit this fiscal year. To put this into context, with a net return on sales of 45 percent, that would mean that almost every second dollar of sales is recorded as net profit. As a market leader in various AI areas, including voice and image recognition and gaming, Nvidia is seeing increasing demand for AI supercomputers that offer complete solutions rather than individual chips.

Conclusion: Despite geopolitical challenges, these five tech companies are currently setting the global standard. Important to know: Your performance is not driven by government subsidies, but by real innovations. These CEOs don’t even know what a bridge electricity price is. Their motto is not: How can we get help? Their motto is: Government, get out of my way.

These companies are what are known on Wall Street as “moat stocks” because their fortress can no longer be taken over by competitors. We can complain about this as European citizens and fight it through trade policy, but we can also benefit from it as investors. Or as a Chinese saying goes:

“The hand you cannot cut off, you should shake.”

Be informed, understand, make the right decisionsHere you can get background information on current financial news. Every Friday as a newsletter.

* Fields marked with an * are mandatory. I agree that BurdaForward GmbH, St. Martin Straße 66, 81541 Munich, will regularly send me news on the topics selected above by email. I also agree that BurdaForward GmbH analyzes the use of the newsletter and uses it to personalize its content and offers. My consent can be revoked at any time. I can provide further information here recall.

You may also like

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy