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Look, this is my last post of 2019, and I’m exhausted. But I can’t let the year end without taking stock of how well tech stocks did this year. It was crazy.
So let’s mark the end of the year by writing some notes. Yes, we know that the Nasdaq has been setting new records and that SaaS had a good year. But we need to dig in and get the numbers out so we can look back and remember.
Let’s end this year the way it deserves to be remembered: as a great trip around the sun for your local public technology company.
Keeping a tally
We’ll start with the important indices:
In 2019, the tech-heavy Nasdaq Composite went up 35%.
The Bessemer Cloud Index, which is based on SaaS, went up 41% this year.
Next, the most valuable U.S. tech companies are:
- In 2019, Microsoft was up about 55%.
- Apple made a gain of 86% in the year.
- Not to be forgotten, Facebook went up 57%.
- In 2019, Amazon had its own gain of 23%.
- The alphabet was also able to grow by 29%.
- Now, let’s talk about some companies that are important to us, even though they aren’t as big as the Big Five:
Salesforce? This year, up 19%
In 2019, Adobe grew by 46%, which was a big deal.
Intel grew by 28% last year, so it’s not a slouch.
Even Oracle was able to grow by 17% in 2019.
The tech industry has been doing so well that The Wall Street Journal said this morning that, thanks to tech companies, U.S. stocks “are set for their best annual performance in six years.” The Journal pointed out that the success of Apple and Microsoft was a big reason for the boom. I don’t know why.
How long will we stay in the Nasdaq 9,000 area? How long can two tech companies have a combined value of more than $1 trillion? How long can it be that the five biggest tech companies are worth a total of $4.93 trillion? I remember when the Big Five were worth $3 trillion, and I remember when they were worth $4 trillion as a group. 1
But the pessimists’ bet has been the worst trade in the past few years. Even with short-term hiccups and other mistakes, stocks have kept going up.
That’s true for almost everyone. Even though tech stocks as a whole did very well, some well-known names did not. Let’s end by saying that a rising tide only lifts most boats.
2019 naughty list
Interestingly enough, some of the worst public tech companies were 2019 technology IPOs. Who didn’t do well? Uber is on the “naughty” list because it is not only worth less than its IPO price but also less than what it was worth at the end of its private life. And, as you guessed, Lyft’s price has gone down since it went public, which is bad.
Some IPOs in 2019 did well in the middle of the year, but as the year came to a close, they didn’t do as well. Pinterest, Beyond Meat, and Zoom, to name a few, meet this criterion. And some SaaS companies had a hard time, even though we think they will eventually make $1 billion in sales.
But mostly it was a party. The stock market was doing well, and tech stocks were doing very well. This helped make more than 100 more unicorns over the course of a year.
So went 2019. On to 2020!
In the long run, those numbers will seem small. But from where I am on December 31, 2019, they look big, tall, and, well, a little dangerously stacked.
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