Special Report

12 American Companies That Control Tech

Six of the 10 largest U.S. publicly traded companies by market cap are technology companies. So far in 2018, the tech sector is the only one to have posted a double digit gain.

The four largest tech companies — Apple, Amazon, Microsoft, and Alphabet — are in a race to be the first to reach a $1 trillion valuation. Apple, with a market cap of nearly $950 billion, is well ahead of the others and is a clear favorite to be the first to reach the magic number.

The following list of the 12 companies that dominate the tech sector are just about evenly divided between hardware and software companies. If one counts Apple as a hardware company and IBM as a software company, then the list is evenly split.

Another interesting observation about the 12 companies on the list is many were the first to create and launch a product that gained and held traction in the market. Those products generated much of these companies’ wealth and later revenue growth.

Apple, for example, released the first graphical operating system on its Macintosh computers back in 1983. It took Microsoft years to catch up, but once it did the Mac became a niche computer. Apple’s iPhone, first introduced in 2007, took a couple of years to reach it’s now dominant market position. The iPhone took 86% of second-quarter profits on global iPhone sales.

Amazon may not have been the first e-commerce website, but it was almost certainly the biggest right out of the gate. Microsoft’s operating system for personal computers was not first, nor was Google’s search engine, but both simply wiped out any competitors.

In the hardware sector, Intel teamed with Microsoft and IBM to make its chips the standard for personal computing. As demand grew for more powerful processors for servers, Intel had a head start. Cisco was not the first networking hardware company (remember Novell and 3Com and a host of others), but it quickly became an industry standard after its products first appeared in the mid-1980s.

Oracle was included among the first of the enterprise database companies, and like Intel and Cisco, it was able to establish itself as a standard. Nvidia, Texas Instruments, and Broadcom all make semiconductors for specialized computing functions, while IBM (mostly) has transitioned itself out of the hardware business. The 108 year-old company moved the software and services business where it competes with “upstarts” like Oracle and others.

These tech giants are also looking ahead to applications using machine learning, artificial intelligence, virtual and augmented reality, and blockchain. Such applications, from self-driving cars to games, to surgical aids, are still mostly under development and many are still years away from being ready for the mass market.

There is no guarantee that any of these companies will continue to dominate their market, but with deep pockets and astute investments, they do not have to build everything themselves — they can buy it. Some of the larger companies on this list may even take a look at buying some of the smaller ones on the list. That has been the Darwinian tale of the tech sector in the last 30 or so years, and that is not likely to change.

24/7 Wall St. ranked our list tech titans by market cap as of May 25, 2018. Included are the companies’ most recent fiscal year revenues, net income, shares outstanding, and number of employees.

Click here to see the 12 American Companies that Control Tech. 

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