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Guess how much Amazon, Alphabet, Apple, and Microsoft have spent on CapEx and R&D over the past decade?
$818 billion
Add Facebook in there and it's $915 billion
[THREAD]
$818 billion Add Facebook in there and it's $915 billion
[THREAD]
Some clarifications:
1. All numbers are in billions
2. Source = annual reports
3. Years are 2010-2019
Let's dive right in...
1. All numbers are in billions
2. Source = annual reports
3. Years are 2010-2019
Let's dive right in...
Amazon
CapEx (inc. capitalized lease payments): $89.8
R&D (tech+content): $141.1
Total: $230.9
CapEx (inc. capitalized lease payments): $89.8
R&D (tech+content): $141.1
Total: $230.9
Alphabet
CapEx: $111.1
R&D: $123.0
Total: $234.1
CapEx: $111.1
R&D: $123.0
Total: $234.1
Apple
CapEx: $92.5
R&D: $78.3
Total: $170.8
CapEx: $92.5
R&D: $78.3
Total: $170.8
Microsoft
CapEx: $64.4
R&D: $118.0
Total: $182.4
CapEx: $64.4
R&D: $118.0
Total: $182.4
Facebook
CapEx: $48.1
R&D: $48.4
Total: $96.5
CapEx: $48.1
R&D: $48.4
Total: $96.5
Add that up and you get $915 billion.
And that's just CapEx and R&D.
So the top 5 big tech companies have invested nearly $1 trillion back into innovation over the past decade.
And that's just CapEx and R&D.
So the top 5 big tech companies have invested nearly $1 trillion back into innovation over the past decade.
If you total the amount of operating cash flow for the same period for all 5 companies, it's:
$1.48 trillion
For free cash flow:
$1.03 trillion
That means these 5 giants invested roughly 90% of their free cash flow into CapEx and R&D.
$1.48 trillion For free cash flow:
$1.03 trillion That means these 5 giants invested roughly 90% of their free cash flow into CapEx and R&D.
A few more observations:
1. Apple hauled in ~ 10x the amount of free cash flow vs. Amazon.
Apple = $486 billion
Amazon = $50 billion
Amazon did spend $60 billion more on CapEx+R&D but the scale of Apple is pretty unbelievable.
1. Apple hauled in ~ 10x the amount of free cash flow vs. Amazon.
Apple = $486 billion
Amazon = $50 billion
Amazon did spend $60 billion more on CapEx+R&D but the scale of Apple is pretty unbelievable.
2. Facebook grew its CapEx+R&D from less than $440 million in 2010 to $28.7 billion in 2019.
That's a CAGR of nearly 60%.
That's a CAGR of nearly 60%.
3. Every one of these companies had a free cash flow conversion rate of over 100% (cumulative FCF/cumulative net income).
Alphabet was the lowest at 103%.
Alphabet was the lowest at 103%.
4. Amazon and Microsoft had the biggest disparity between R&D and CapEx spend.
Both of them had $50 billion more in R&D.
The next closest was Alphabet with $10 billion more.
Facebook was about the same for each.
Apple had $14 billion more in CapEx.
Both of them had $50 billion more in R&D.
The next closest was Alphabet with $10 billion more.
Facebook was about the same for each.
Apple had $14 billion more in CapEx.
5. The disparity was surprising in R&D vs. CapEx because AMZN and MSFT are the #1 and #2 in the cloud.
I would've guessed CapEx to be higher to build out all those data centers.
I would've guessed CapEx to be higher to build out all those data centers.
End/
The combined market caps for these 5 companies is now about $7 trillion.
That's equivalent to the GDPs of India, France, and Italy...COMBINED.
Just mind-blowing scale
The combined market caps for these 5 companies is now about $7 trillion.
That's equivalent to the GDPs of India, France, and Italy...COMBINED.
Just mind-blowing scale
