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I find it increasingly hard to form an investment thesis around big tech companies like Microsoft, Apple and Alphabet. Mostly because the CEOs all seem so simi

I find it increasingly hard to form an investment thesis around big tech companies like Microsoft, Apple and Alphabet. Mostly because the CEOs all seem so similar. Every time I listen to investor calls of one of them, they are all like "We are proud that we have built tons of great stuff and are excited to build more amazing great stuff.". I do not see any big bets or different approaches that differentiate the companies. Can you guys tell me why you would rather invest in one of the big tech companies than the other?

laurent92 5y ago
Atlassian! Don’t miss Atlassian. It went up from $120 to $180 during Covid. Wait, $230, no, 320, today $483! Disclosure: I own shares. I’ve paid them less than $30. I knew Atlassian was excellently managed, but I didn’t imagine it would climb this high. I’m surprised it always goes silent next to GAFAM.
bigtones 5y ago
Sure, if your thesis is that all the worlds corporate server computing is migrating away from company owned and operated data centers and into cloud computing providers over the next decade, then you would invest in Amazon (AWS) or Microsoft (Azure). If you made that investment decision 5 years ago you would have tripled your money already.
- ArtTimeInvestor 5y ago
  That is indeed one of my thesis. But how does it not apply to Google? They run datacenters too.
capableweb 5y ago
No, they are all the same and you'll do best by splitting your investment equally among the ones you're considering.
- deleted 5y ago
  [deleted]
rbanffy 5y ago
Of the three, I find Apple the easiest to understand - they actually build physical stuff and that's the core of their business. Apple could operate in a vacuum and still be profitable. Their business model is neat and simple.
- ArtTimeInvestor 5y ago
  Isn't Microsoft also very easy to understand? We need datacenters. Microsoft runs them. We need all kinds of business software. Microsofts offers it. We want to play games. Micosoft offers that too. And Google ... we need someone to organize all that publicly available data on earth, right? Well, Google does that.
  - rbanffy 5y ago
    > And Google ... we need someone to organize all that publicly available data on earth, right? Well, Google does that. You know their money doesn't come from organizing the publicly available data, but from organizing all behavior data you generate as you browse all that publicly available data ;-)
  - AstroDogCatcher 5y ago
    It is a bit more dark than that, sadly. Of the big cloud providers, Azure is the least well regarded by users (significantly so), but MS have the longest pedigree of twisting the arms of corporate procurement people. Similarly, Apples ability to make cool stuff is dwarfed by their ability to coerce people into paying huge sums for minor hardware upgrades.
    - rbanffy 5y ago
      If your software licenses translate into cloud credits, then it's a no-brainer. Clever engineers like us will make it work with stone knives and bear skins if that's what they provide us.
    - pleb_nz 5y ago
      I would say a Google Cloud is least regarded as a cloud provider. I often see mention of his people would never use GC for to keep it trust. E.g is that service or product going to remain available or be deprecated. From what I understand GC had a fairly bad reputation for this.
sailingparrot 5y ago
The three companies you have listed have radically different businesses. They just happen to all be in what we call "tech". Alphabet revenue are 98% based on ads. How do you see the future of ads in the current landscape? If you are bullish then invest away. If not, then does Alphabet has a viable alternative they are investing in for the long term? Microsoft revenue is a mix of a ton of different things, the biggest of which are cloud, productivity (Office and such), and direct consumer products (Xbox, Windows etc). They are basically selling shovels in the tech-age gold rush. They have just so many different billion dollar revenue streams that they could lose any one of their 3 big businesses and still be ok. But by far their biggest growth driver is Azure for now, how do you feel about that versus the competition? Apple is all about consumer hardware, as long as they continue delivering best in class product they will be making tons of cash. They are also looking to enter the electric car industry one way or the other, which is potentially a gold mine, do you think they can succeed?
- ArtTimeInvestor 5y ago
  I am not very bullish about the future of ads but I don't see Google being limited to ads. Search is not valuable enough for users at the moment to pay for it. But with the advent of AI, your "AI companion" will become so valuable that users will probably pay hundreds of dollars per month for it. Apart from that, they build phones, run datacenters, develop self driving cars, business software ... As for Azure, I think Googles cloud business is in the same order of magnitude. I don't see one of them having a long term competitive advantage here. As for Apple, I think consumer demand in tech will grow just like business demand in tech will grow. And I don't see anyone disrupting Apple either. They will just continue to iterate and grow. IF some new development appears on the horizon, then it will be interesting how the 3 CEOs will position themselfes. But at the moment, I don't see anything that will disrupt any of these companies.
  - ashwoods 5y ago
    The parent mentioned not what alphabet does, but where it gets (most) of its revenue from. Google is making phones, but not really making a lot of money from them. So the question is, what is the future of alphabet?
paxys 5y ago
These companies are all making a ridiculous number of big bets. Apple Silicon, TV production, self driving cars, household robots, smart assistants, AR/VR, healthcare. Every startup out there is meanwhile building a generic enterprise SaaS app with a React front end.
- thefourthchime 5y ago
  Pretty much. They help make the glue for the big boys. I miss 2006 when it seemed like any startup could become something big. It's seems impossible now.
- ArtTimeInvestor 5y ago
  How is Apple Silicon a big bet? The company is so big, what could go wrong with them making their own chips? Would it really tank the company if one day it turns out it is better to buy chips from external companies again?
tomjen3 5y ago
Since I own APPL stock, yes. ARM is the future of laptops, and the M1 is amazing. You can't buy, at any price, an ARM laptop that compares to it anywhere else but from Apple and I don't see anybody else able to do it - MS has tried and failed because they don't own the stack well enough that they can get x86 to work. So I invested in APPL. I haven't invested in Microsoft, because I don't know enough about what they are doing, and won't invest in metabook due to ethics.
- ArtTimeInvestor 5y ago
  But tech is not just laptops :) Even if Apple has a competitive advantage regarding laptops, I don't see that making Apple a better investmen than Google or Microsoft as they have their areas too where they are best.
  - tomjen3 5y ago
    Because Apple has 10% of the market, but a better product. Google arguably has the best product, but they also have 99% of the market. Nowhere else to grow.

laurent92 5y ago

Atlassian! Don’t miss Atlassian. It went up from $120 to $180 during Covid. Wait, $230, no, 320, today $483! Disclosure: I own shares. I’ve paid them less than $30. I knew Atlassian was excellently managed, but I didn’t imagine it would climb this high. I’m surprised it always goes silent next to GAFAM.

bigtones 5y ago

Sure, if your thesis is that all the worlds corporate server computing is migrating away from company owned and operated data centers and into cloud computing providers over the next decade, then you would invest in Amazon (AWS) or Microsoft (Azure). If you made that investment decision 5 years ago you would have tripled your money already.

ArtTimeInvestor 5y ago
That is indeed one of my thesis. But how does it not apply to Google? They run datacenters too.

capableweb 5y ago

No, they are all the same and you'll do best by splitting your investment equally among the ones you're considering.

deleted 5y ago
[deleted]

rbanffy 5y ago

Of the three, I find Apple the easiest to understand - they actually build physical stuff and that's the core of their business. Apple could operate in a vacuum and still be profitable. Their business model is neat and simple.

ArtTimeInvestor 5y ago
Isn't Microsoft also very easy to understand? We need datacenters. Microsoft runs them. We need all kinds of business software. Microsofts offers it. We want to play games. Micosoft offers that too. And Google ... we need someone to organize all that publicly available data on earth, right? Well, Google does that.
- rbanffy 5y ago
  > And Google ... we need someone to organize all that publicly available data on earth, right? Well, Google does that. You know their money doesn't come from organizing the publicly available data, but from organizing all behavior data you generate as you browse all that publicly available data ;-)
- AstroDogCatcher 5y ago
  It is a bit more dark than that, sadly. Of the big cloud providers, Azure is the least well regarded by users (significantly so), but MS have the longest pedigree of twisting the arms of corporate procurement people. Similarly, Apples ability to make cool stuff is dwarfed by their ability to coerce people into paying huge sums for minor hardware upgrades.
  - rbanffy 5y ago
    If your software licenses translate into cloud credits, then it's a no-brainer. Clever engineers like us will make it work with stone knives and bear skins if that's what they provide us.
  - pleb_nz 5y ago
    I would say a Google Cloud is least regarded as a cloud provider. I often see mention of his people would never use GC for to keep it trust. E.g is that service or product going to remain available or be deprecated. From what I understand GC had a fairly bad reputation for this.

sailingparrot 5y ago

The three companies you have listed have radically different businesses. They just happen to all be in what we call "tech". Alphabet revenue are 98% based on ads. How do you see the future of ads in the current landscape? If you are bullish then invest away. If not, then does Alphabet has a viable alternative they are investing in for the long term? Microsoft revenue is a mix of a ton of different things, the biggest of which are cloud, productivity (Office and such), and direct consumer products (Xbox, Windows etc). They are basically selling shovels in the tech-age gold rush. They have just so many different billion dollar revenue streams that they could lose any one of their 3 big businesses and still be ok. But by far their biggest growth driver is Azure for now, how do you feel about that versus the competition? Apple is all about consumer hardware, as long as they continue delivering best in class product they will be making tons of cash. They are also looking to enter the electric car industry one way or the other, which is potentially a gold mine, do you think they can succeed?

ArtTimeInvestor 5y ago
I am not very bullish about the future of ads but I don't see Google being limited to ads. Search is not valuable enough for users at the moment to pay for it. But with the advent of AI, your "AI companion" will become so valuable that users will probably pay hundreds of dollars per month for it. Apart from that, they build phones, run datacenters, develop self driving cars, business software ... As for Azure, I think Googles cloud business is in the same order of magnitude. I don't see one of them having a long term competitive advantage here. As for Apple, I think consumer demand in tech will grow just like business demand in tech will grow. And I don't see anyone disrupting Apple either. They will just continue to iterate and grow. IF some new development appears on the horizon, then it will be interesting how the 3 CEOs will position themselfes. But at the moment, I don't see anything that will disrupt any of these companies.
- ashwoods 5y ago
  The parent mentioned not what alphabet does, but where it gets (most) of its revenue from. Google is making phones, but not really making a lot of money from them. So the question is, what is the future of alphabet?

paxys 5y ago

These companies are all making a ridiculous number of big bets. Apple Silicon, TV production, self driving cars, household robots, smart assistants, AR/VR, healthcare. Every startup out there is meanwhile building a generic enterprise SaaS app with a React front end.

thefourthchime 5y ago
Pretty much. They help make the glue for the big boys. I miss 2006 when it seemed like any startup could become something big. It's seems impossible now.
ArtTimeInvestor 5y ago
How is Apple Silicon a big bet? The company is so big, what could go wrong with them making their own chips? Would it really tank the company if one day it turns out it is better to buy chips from external companies again?

tomjen3 5y ago

Since I own APPL stock, yes. ARM is the future of laptops, and the M1 is amazing. You can't buy, at any price, an ARM laptop that compares to it anywhere else but from Apple and I don't see anybody else able to do it - MS has tried and failed because they don't own the stack well enough that they can get x86 to work. So I invested in APPL. I haven't invested in Microsoft, because I don't know enough about what they are doing, and won't invest in metabook due to ethics.

ArtTimeInvestor 5y ago
But tech is not just laptops :) Even if Apple has a competitive advantage regarding laptops, I don't see that making Apple a better investmen than Google or Microsoft as they have their areas too where they are best.
- tomjen3 5y ago
  Because Apple has 10% of the market, but a better product. Google arguably has the best product, but they also have 99% of the market. Nowhere else to grow.