The year 2021, rich in financial records, is almost over, and we can already sum up some of its results. Let's take a look at how this year went for the largest IT companies and note the events that may favorably affect the growth of their shares next year.
Apple (AAPL)
The capitalization of the world's largest company in 2021 has not reached the $3 trillion mark, as many expected. Both the general situation on the market and its own negative aspects prevented it. For example, a legal conflict with Epic Games, as a result of which the court ordered Apple to allow transactions inside App Store applications through third-party payment systems, which will deprive the company of part of its revenue. However, on December 8 it became known that the Court of Appeal suspended the execution of the earlier decision, so the case will be considered again.
Nevertheless, analysts from Morgan Stanley call Apple the best stock to invest in 2022. In their opinion, the development of new products, headsets and self-driving cars will become new drivers for the growth of these securities next year.
Since the beginning of the year, Apple shares have already grown by 35%. According to TipRanks, analysts' consensus estimate on the target price of these securities is $168.
Microsoft (MSFT)
The shares of Bill Gates' brainchild have shown good growth this year due to excellent financial indicators. Of particular note is the cloud data segment, which reflects the broad prospects of the metaverse market. In November, the company presented the opportunity to create virtual avatars and workspaces in its Microsoft Teams collaboration platform.
Since the beginning of the year, the shares have increased by 55%, and today the consensus estimate of analysts about their target price is at $368.
Alphabet (GOOGL)
Shares of Alphabet, Google's parent company, have grown by 70% since the beginning of the year due to a uniform increase in revenue across all business lines. Separately, we can note the conclusion of an agreement for $1 billion with the Chicago Stock Exchange (CME Group). In accordance with this agreement, CME Group will transfer its technology infrastructure to Google Cloud in 2022, and Google will acquire preferred shares of the exchange in the amount of $1 billion.
Among the negative events, it is worth highlighting the antitrust lawsuit against Alphabet by the US Department of Justice, which can lead to serious consequences, up to the separation of the company.
According to the consensus estimate, Alphabet shares have the potential to grow to the level of $3287.
Amazon (AMZN)
Shares of the large online retailer Amazon have been in a sideways trend for almost the entire year, as the company's financial results did not meet analysts' expectations. The emergence of coronavirus vaccines and the weakening of the pandemic has led to a decrease in online trading.
Just like Microsoft and Google, Amazon provides cloud data services, which brings the company a significant share of revenue. Among Amazon's innovations, we can single out an order for the supply of 100 thousand Rivian electric vans for cargo delivery. The company plans to switch to environmentally friendly cars by 2030.
Meanwhile, the company's founder Jeff Bezos is developing space tourism in parallel with online commerce, and his company Blue Origin successfully sent its second civilian crew into space in October.
Amazon shares have grown by 9% since the beginning of 2021, and the consensus estimate of analysts aims them to grow to $4,120.
Tesla (TSLA)
At the end of November, Tesla reached a capitalization of $1 trillion. The event took place against the background of an increase in the supply of cars of the company, which was not prevented even by the shortage of semiconductors in the automotive industry.
However, Tesla quickly left the "trillionaires club" when its CEO Elon Musk conducted a survey on Twitter about the sale of 10% of his stake in the company's capital, that is, 17 million shares.
It is now known that according to the results of the survey, Musk has already sold 11 million securities. One of the possible reasons for the large-scale sale is the initiative of US senators to tax the unrealized income of billionaires. Also, according to Ilon himself, he does not have a salary, and therefore he periodically has to sell shares in order to have cash. It is noteworthy that his brother Kimbal also sold Tesla securities worth about $100 million. And in October, they were actively “dumped” by Ira Ehrenpreis, a member of the company's board of directors, who sold shares totaling over $200 million.
However, despite these sales, Tesla shares are still trading 46% above January levels. According to TipRanks, the consensus forecast of analysts indicates that during the year their quotes will reach $982.
From the latest significant corporate news, it can be noted that Tesla is postponing the mass production of Cybertruck pickups until the end of 2023 due to difficulties with their assembly. But as for passenger electric cars, Elon Musk has grandiose plans: by 2030, the company plans to sell 20 million cars a year, which is theoretically possible if we take into account the current growth rates of supplies.
Meta Platforms (FB)
Facebook shares in early October fell by 5% due to major disruptions in the work of the social network of the same name, and at the end of the same month the company announced a rebranding and changed its name to Meta Platforms to emphasize its focus on the development of its own metaverse Horizon Worlds, which is already open to all residents of the United States.
Among other positive news, it is worth noting the partnership of Meta with the Novi payment service, thanks to which the instant transfer function of the Tether cryptocurrency will appear in the WhatsApp messenger.
Since the beginning of September, Meta shares have been declining from their maximum peaks of $380 due to concerns about a decline in the company's advertising revenue amid disruptions in global supply chains and uncertainty caused by its new development strategy. Analysts' consensus estimates converge at around $406 per share.
Nvidia (NVDA)
The largest manufacturer of video cards on the background of news about the creation of their metaverses by corporations has greatly increased in price. The development of metaverses requires the improvement and distribution of AR and VR equipment, components for which Nvidia produces.
Demand for Nvidia graphics cards and services is also provided by the growing popularity of cryptocurrencies, which even caused a shortage of its products this year, which is expected to continue until the end of 2022.
The company is trying to offset the shortage of products through business expansion by absorbing the British chip developer Arm. A company from the United Kingdom provides its technologies to many Nvidia competitors, therefore, due to the risk of violating antitrust laws, the US Federal Trade Commission requires blocking this transaction through the court.
Over the year, the company's shares showed an increase of 142%. Analysts' forecasts promise them an increase of up to $360 within a year.
Analysts' opinion
In the past year, we have observed a growing trend in the businesses of the largest bigtech companies in the USA. Companies expanded their spheres of influence and modernized their business, which allowed them to maintain high revenue growth rates and introduce new products. The current trend creates new markets for technological services, which increases the infrastructural importance of large IT corporations.
In 2022, the leaders of the American high-tech sector plan to continue working on improving their ESG ratings and in this regard will serve as a role model for many companies around the world.