Microsoft recently has been caught up in the hacking attack on network management software from SolarWinds. Microsoft’s networks were compromised by infected updates, but the company said Friday that it has found no evidence that its own systems were used to spread the attack to its own customers.
The company’s P/E ratio for the past 12 months is 33.8, and that is expected to fall to 32.3 in fiscal 2021, 29.2 in 2022 and 25.2 in 2023. Microsoft’s annual dividend is currently $2.24 per share, for a yield of 1.02%.
Amazon.com Inc. (NASDAQ: AMZN) was the fourth tech firm to join the trillion-dollar club, in February of this year. Since then, the e-commerce giant has added nearly 60% to raise its valuation to $1.59 trillion. There’s little question that the sharp growth since February is the result of the COVID-19 pandemic that has lifted U.S. consumer spending on e-commerce to unprecedented levels.
Along with the other tech giants, Amazon faces some potentially massive changes to its operations, particularly in Europe, where the European Commission has proposed a regulatory framework that would require the companies to police their content more aggressively than they do currently. New regulations limiting the companies’ use of their stored customer data to restrain competition are also being proposed. Penalties could be severe, with fines equal to as much as 10% of global turnover. In Amazon’s case, that could be up to $28 billion. Nothing will happen soon, but this is not particularly good news for any of the tech giants.
Over the past decade, Amazon’s shares have added more than 1,600%, and more than a third of that just since February. Over the past 12 months, Amazon stock has traded at a whopping P/E ratio of 90.1. That number is expected to reach 91.8 at the end of the 2020 fiscal year and then drop to 71.1 in 2021 and 50.5 by 2022.
The parent of Google, Alphabet Inc. (NASDAQ: GOOGL) is valued at $1.18 trillion, based on its Class A voting shares, and $1.19 trillion based on the price of its Class C non-voting stock (trading on the Nasdaq under the ticker symbol GOOG). The company is the youngest of the four, having come public in August 2004. Since then, shares have appreciated by nearly 1,000%.
While regulatory changes are challenging the tech giants in Europe, in the United States, the U.S. Department of Justice and Republican attorneys general from 11 states filed suit in October charging Google with anti-competitive behavior. Since then, two more lawsuits have been filed. In one, attorneys general from 38 states have charged Google with trying to extend its monopoly over general search to so-called vertical search for such things as airplane tickets and restaurants. The third lawsuit, brought by a smaller group of states, is seeking to sever Google’s digital advertising business from its search ad business. If any of these is successful, Alphabet could face some serious changes.
Alphabet’s P/E ratio for this year is expected to be around 33.4, before declining to 27.9 next year and 23.3 in 2022.