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Google, Amazon, Microsoft and Apple (GAMA stocks), are those richest modern-day American companies, that together make up “Trillion Dollar Club”. Should you consider investing in them? Our guide will help you in making a decision.
GAMA stocks became historic. Up to this day, only four American companies have ever managed to surpass the threshold of one trillion dollars. Apple, Amazon, Microsoft and Google have crossed the mark and entered the elite club of the most expensive American companies in the world.
For a common investor, it means that anticipations are heating up. In the expectation that the stock price will go even higher, many predict that 2020 is the best year to buy FAAMNG stocks. Up to now, it seems justified, for GAMA stocks have only been going upwards since the beginning of 2020. Indeed, GAMA companies perform outstandingly good in terms of profitability and even outperform S&P 500 index.
What is more, some industry experts consider that the price of GAMA stocks can reach even higher. Since the tech market is continuously growing and gives fertile ground for non-stop innovation, the companies direct their efforts into conquering new areas, such as machine learning, AI and automation. That already gave birth to a whole new range of product offerings – from cloud to autonomous driving – that will drive the companies’ bottom line far ahead for many years to come.
There’s speculation that Facebook can be the next addition on the list. In the near future, the company is planning to dive deeper into virtual and augmented reality, decentralization, privacy and overall retain the leadership stance in social media. Besides, if the pending Libra project passes on, the company may create its own payment ecosystem. If that comes true, Facebook ads will get costlier, allowing the company to achieve higher growth and quite possibly, market value. Whether a “Trillion Dollar Club” will welcome a new member or not remains to be seen.
Starting 2020 on an extremely positive note, GAMA stocks are continuing to surprise their investors with their returns. But what lies behind their success and how did the companies achieve the milestone one trillion value? Let’s look into their cases one by one.
The company is the freshest member of a “Trillion Dollar Club” and also the youngest on the list. Being founded by Larry Page and Sergey Brin back in 1998, the company is now the largest provider of online services and the biggest search engine in the world. Not so long ago, Larry Page stepped down from his role as CEO of Alphabet, Inc., Google’s parent, giving a place to Sundar Pichai, who is now a director of both companies.
The stock immediately reflected a positive sentiment – a good indicator that investors have a belief in the new CEO. For the upcoming year, mr. Pichai plans to focus on AI, machine learning and expand cloud business, while also transforming transportation and leveraging AI to advance healthcare. Having strong strategic priorities and a successful record of past achievements, it is highly probable that Google stock will only continue to grow.
The company started as a small computer producer in 1976, and already ten years later transformed into the largest seller of smartphones ever. Apple made billions of dollars with iPhone alone. The company continues to develop the product with additional features, although not so groundbreaking as in the first models.
Nevertheless, this does not make Apple less sought-after – the company’s stock is showing stable signs of growth. Nowadays, Apple is getting larger by the means of services, which come only as the second-largest segment after iPhone. Apple Card and Apple TV+ are only a few additions of 2019.
From the very first days in 1975, the future tech giant specialized in developing Windows operating systems. Now having a presence in almost every home and every business, and it’s difficult to imagine things playing out the other way around. The stock of Microsoft was not showing any extraordinary results before then-new CEO, Satya Nadella, came with a new approach to business.
Nowadays, the corporation is increasingly focusing on cloud business, trying to make it the driving force behind the upcoming optimistic quarterly results. The fact that Microsoft stock gained 55% during 2019 shows that the era of prosperity is not over yet.
Originally conceived as an online bookseller, the company may serve a perfect example of how the business can successfully grow in many strategic areas. Started in 1994, for long Amazon stayed as nothing else but an e-commerce company. That changed, however, with the introduction of Kindle what proved that Amazon can do more than just selling online.
Later, the company expanded into Amazon Web Services (AWS), the resources (or services) that can be rented by any company to build own application. It includes big data or services for building games, which usually come at a lower cost than renting data centers or creating own network for the company from scratch.
On Amazon’s customer list can be found Uber, Lyft and Pinterest. However, despite Amazon did a good job diversifying to a new business line, it is still the only one on the list whose collective value is below the mark of trillion these days.
GAMA companies achieved the remarkable success that can hardly be compared to any other players on the market. All four of them are industry leaders and game-changers who disrupted many conventional industries and made our lives the way they are now.
From smartphones to Google search, these are the things we cannot think ourselves without. What is more, the companies showed their aptitude to sound financial management. From a very little amount of debt to significant excess cash to reinvest, this all helped them to grow steadily and capitalize on a very long-running bull market. This all probably inspire you into thinking that GAMA stock will be a good bet during many more years to come.
On the other hand, the fact that GAMA are members of a “Trillion Dollar Club” should not be the sole driver behind your investment decision. The market value of a company is only a good-looking number that does not show much apart from the beliefs of the broader public.
Rather, what you should look at is the fundamentals, long-term goals, values and leadership of the company, while also finding out more of vulnerable areas and potential pitfalls. For example, a change in the regulatory environment can affect GAMA largely, since they are deeply involved in issues of consumer data and intellectual property. By getting to know all the nuances in advance, you will be more confident and will feel more secure about your potential future investment.
Having been on the market for only a few decades, GAMA companies became the titans of the American economy. They heavily leverage the intellectual capital, emphasize innovation and carefully look after their financial statements. Achieving the milestone of 1 trillion in market cap clearly shows that investors have a strong belief in the future success that can be stretched into many years to come.
GAMA stocks can be a safe bet, especially compared to fresher tech companies, and promise a good return on investment. That all makes members of a “Trillion Dollar Club” incredibly haunted among investors and an attractive choice for all who believe in the future of tech.