The biggest market headline last week came from Amazon’s $13.7 billion acquisition of Whole Foods. The transaction left many investors scratching their heads. Wasn’t Amazon supposed to be in the online retail and cloud business? Why are they buying a high-end grocery chain?
Amazon’s acquisition speaks to a broader trend amongst mega-cap technology companies: the desire to be a one-stop shop for consumers. Facebook wants users to log-in daily and get all of their news from the site; Google wants users to consolidate email, workflow, and search all in one place; Netflix wants to be the go-to source for at-home entertainment; Apple wants loyal customers to only buy their hardware and software; Amazon wants, well, they want everything it seems.
These mega-cap companies have two distinct advantages in the marketplace: high visibility and astronomical amounts of cash. It begs the question I posed with the title of this week’s column: is tech slowly taking over the entire market? And as an investor, does that mean you should be bulking up the technology holdings in your portfolio? I’ll explore those questions here.
The biggest market headline last week came from Amazon’s $13.7 billion acquisition of Whole Foods. The transaction left many investors scratching their heads. Wasn’t Amazon supposed to be in the online retail and cloud business? Why are they buying a high-end grocery chain?
Amazon’s acquisition speaks to a broader trend amongst mega-cap technology companies: the desire to be a one-stop shop for consumers. Facebook wants users to log-in daily and get all of their news from the site; Google wants users to consolidate email, workflow, and search all in one place; Netflix wants to be the go-to source for at-home entertainment; Apple wants loyal customers to only buy their hardware and software; Amazon wants, well, they want everything it seems.
These mega-cap companies have two distinct advantages in the marketplace: high visibility and astronomical amounts of cash. It begs the question I posed with the title of this week’s column: is tech slowly taking over the entire market? And as an investor, does that mean you should be bulking up the technology holdings in your portfolio? I’ll explore those questions here.
Disclosure