Entirely? Google revenue in 2014 ($66B) to 2019 ($161B) is 143% growth over 5 years.
No doubt monetary policy has an effect, but tech companies have grown substantially over that time as well.
What I don't get either is why quarterly reports in the current situation are so important for stock value in the current market climate, as in why did tech stocks soar so much after quarterly reports got announced? These numbers aren't showing anything other than how the companies perform in the current, corona-affected, economy and are not representative of how it's going to look like in a post corona world.
Because the future is uncertain, and that uncertainty was baked into the price? And there's nothing to say that "baked into the price" has to be accurate... investors could have collectively read the tea leaves wrong.
> These numbers aren't showing anything other than how the companies perform in the current, corona-affected, economy
Which could be considered passing a stress test with flying colors - maybe people are interpreting this as "which businesses are robust or anti-fragile for a once in a century event". Or just as easily - maybe investors are betting there's a chance that some of this current context is the new normal.
I'm a little confused as to what you're trying to ask overall. Markets and investors aren't perfect, the future is uncertain, and random walks are everywhere.
Valuations are important. Valuations are affected by the monetary policy/liquidity cycle. And Google's valuation is growing faster than any rational measure of economic value.
I did just eyeball it from a few months before. And note, I said 2000...not 2001. And even at the end of 2001, it did nothing for a decade plus.
But let's not confuse profits, or market cap, with innovation or value.
USDEUR stayed the same (both inflated together), but there are no new tech companies in the EU to show for.
This is all while "traditional" businesses have had governments shut them down or tell their customers to stay at home.
If you were an investor paying attention over the last 6 months you would be selling everything else and buying tech.
Also a few billion people stuck at home much more than usual this year.
Meanwhile, markets like e-commerce, telecommunications and online entertainment are booming thanks to the stay-at-home culture, and no doubt there will also be an entire generation of new and/or rapidly growing products and services aimed at supporting home offices, flexible work patterns and more distributed teams.
I'm not sure we'll ever go all the way back to how things were now, even if someone discovers a perfect cure for the coronavirus problem tomorrow. I think when the dust has settled, we will have learned that it's often useful to have specialised workplaces, but also that working from home is fine for some people doing some jobs at least some of the time if they want to. I suspect we'll see some big, permanent changes in industries like retail as a result, and that this in turn will sustain at least some of the boost that a lot of tech stocks have received recently.
Even for some companies that have had some boost, the spike in share prices has been over exaggerated. One glance at the price movements and it’s fairly obvious. A company like DataDog or Fastly is NOT 2-4 times as valuable just because more ppl are working from home. This market is 99% fed-induced, and 1% actual fundamental improvement
For the uninformed, what monetary policy exactly is driving this growth?
One way to juice the economy is just print more money and give it to everyone. Everyone's richer, yay! Except you haven't increased production or necessarily consumption, so prices will just equalize to the new money supply and you get consumer price inflation.
For QE, we got smarter, and just gave all of the money to the bankers, because that's what all the economic experts who work at banks said to do. So all of the inflation happened in assets held by banks and rich people instead -- tradeable securities and real estate in coastal areas.
Look here for ex. https://fred.stlouisfed.org/series/MABMM301USM189S
https://www.reuters.com/article/us-alphabet-bonds/google-own...
"Of the $10 billion on offer, the $1 billion five-year tranche was issued at a coupon of 0.45%, the lowest coupon seen on a U.S. corporate bond at that maturity, according to Refinitiv data, which goes back to 1980."
I can give similar links for Apple: https://finance.yahoo.com/news/apple-joins-tech-borrowing-bo...
The Coronavirus CARES act enables the Federal Reserve to buy Corporate Bonds. This is one of the factors driving down the bond rates: https://www.proskauer.com/alert/corporate-credit-facilities-...
"The SMCCF, initially funded with $25 billion of equity from Treasury, will leverage its equity ten times when acquiring corporate bonds from investment grade issuers and ETFs whose primary investment objective is exposure to investment grade corporate bonds. It will leverage its equity seven times when acquiring corporate bonds from issuers rated at below investment grade, and from three to seven times when acquiring other eligible assets, depending on risk."
So if you're a large corporation capable of selling bonds you can get a loan for far less than even the extreme low end inflation predictions. The big tech companies have the ability to take advantage of the current climate.