It's hard for a bubble to burst when it's cheap to borrow money.
Edit: Tesla and Saudi Aramco (duh) aren't actually on the NYSE... Something something HN before coffee something
Edit 2: Neither is Alphabet or Micros... you know what, just read publicly traded companies instead of NYSE.
I think I know what you mean, but what are you really saying here?
What I'm saying is that tech is a mature sector of the economy that is adjacent to but different from the startup world, and while cheap capital may inflate startup valuations, it's not the reason Apple or Alphabet are valued as they are.
Unless the potential for higher future interest rates were not baked into the quoted multiple. Interest rates are just one factor among many that go into a price. And they are among the most predictable.
The biggest factor contributing to tech companies’ higher multiples is that every year they have come up with a new way to print money (especially AMZN and AAPL) for a decade running.
To assign a lower P/E is, fundamentally, to discount that track record. Not that it’s a bad bet, but it doesn’t have much to do with interest rates, IMO.
They make electric cars with what are essentially really large laptop batteries. There's not a lot of "revolution" there. There's evolution. At the end of the day they're making cars that fit people and drive on existing roads. Their technology isn't bad but it's not some major revolution.
The technology they crow about like FSD does not work very well. It's also unlikely to get better because of hubris at the top about sensors.
They want to be seen as a tech company but they're a car company. Electric cars are cool and are a marked improvement over ICE cars but they're still cars.
Apple's biggest revolution was the manufacturing chains they built in China.
Pure software companies have some highly desirable attributes for investors, namely practically non-existent marginal costs, that have driven up their valuations. As a result, many companies that are not primarily in the business of selling software have tried to position themselves to investors as "tech companies".
Nothing against these companies, manufacturing, real estate, food delivery, vacations rentals, and taxi services are all perfectly fine business, but they're not in the software production industry, they're software consumers.
We see how hard it is to achieve self driving vs build a car. The market forces for self driving will be huge over any car manufacture no matter how good if they dont have this technology. Who wants to drive if you dont have to. What trucking companies want to pay for drivers when they dont have to.
Software will be a, even 'the', defining variable in the car industry soon enough.
In other words, you are arguing that every company is a tech company.
The issue with FSD is it is not and cannot just be software. You can't just use a couple 2D cameras and think you'll software your way to success. Humans use a lot more than just their vision to drive.
Tesla is making a mistake in thinking they can just throw some relatively cheap cameras on a car and throw software at the problem. Spacial awareness from only 2D images in fantastically hard and extremely error prone. A reliable FSD will need ranging/detection sensors (RADAR/LIDAR), inertial sensors, image sensors, and external sensors like GPS and likely coded road signage.
Software is obviously a component of FSD but not the only one.
Berkshire is 20% Apple now.
Zoom has reduced leasing costs for many companies tbh
I've found in looking at problems in general it helps to try to take a systems perspective. If you only look one step back everything makes sense and is fine, but when you start looking at the larger flows of everything is when you start to think that maybe the accounting doesn't all work out.