How much larger will leading tech companies, Facebook, Google, and Amazon, grow?
Some of the largest tech companies, Facebook, Google, and Amazon, have had a good run but it looks like at least two of these companies (Facebook and Google) may have reached their apex. By reaching their apex, I mean to say that these companies may have matured from young companies with rapid growth to companies from which investors should expect to receive slower long term gains. However, Amazon seems to be the exception.
Why Amazon is Still Growing So Quickly
There's a few reasons why Amazon's growth seems to be continuing at such a quick rate. One reason is that Amazon is involved in so many industries. When Amazon was first founded it was an online book store. Now, Amazon publishes and sales books, develops electronics, and even delivers food. It's actually difficult to think of a market Amazon isn't involved in.
Amazon is also the go to service for nearly all online shopping needs and is really a cross between a tech company and a retail company. On the other hand, Google and Facebook focus more on technology and both face strong competition in their own markets. For example, Google has to compete with Apple when it comes to phones and both Apple and Amazon when it comes to tablets. Facebook has to compete with Twitter, Instagram, and other social media services. Amazon, primarily being an online shopping company does face competition from other online shopping sites, but it's not nearly as strong as the competition Google and Facebook receive from companies in their own industries.
Legal Trouble Is Hurting Growth
Google and Facebook have both been facing legal issues, which has been hurting the growth of their companies and reducing investor confidence. Facebook has been the most recent victim of a fall in investor confidence with their stocks dropped by 19% and their market capitalization plummeted by $119 billion, the largest drop in market capitalization on record.
Google and Facebook have also been hit with increased regulations from the European Union (EU) that deal with protecting the privacy of users. Facebook in particular has been facing scrutiny because of the spread of misinformation on Facebook that occurred during the United State's 2016 presidential election. On the other hand, Amazon has yet to be bombarded by government regulators. Probably because Amazon's business is structured around online shopping. For the most part, consumers and political officials seem to not be too concerned with increasing regulations for online shopping.