The VERY Long View: The Biggest TMT Companies for 2025

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Of the top 10 US TMT companies by market cap today, just 5 were on the list a decade ago. AAPL, AMZN and FB were nowhere to be seen, and GOOG had just edged onto the list at #10. Meanwhile, MSFT leads the list resilient enough to stay near the top, while CSCO and IBM fell off of the list, down from numbers 2 and 3 in 2005. How will the list change between now and 2025?

About half of the top 10 TMT stocks churn every decade. Of the top 10 US TMT stocks by market cap at the end of 2005, just 5 are on the list today – GOOG, MSFT, T, VZ, and INTC. MSFT, T, VZ and INTC have all inhabited the list for 15 years, with MSFT, INTC and T each going back more than two decades. IBM may be the all-time TMT champ, having only fallen out of the top 10 a year ago after 50+ years at or near the top.

The top five all look likely to stay on the list. AAPL, GOOG, MSFT, AMZN and FB are the five largest US TMT companies today, and all have huge established platforms that appear very likely to remain relevant for the coming decade. The next five, T, VZ, DIS, INTC, and ORCL all face major strategic challenges that demand action, if they are to stay high on the list. Of these, we believe DIS, with its tent-pole content franchises, stands the best chance of finding an answer.

Several companies are on trajectory to challenge for the top. NFLX shares, up 140% for 2015 to a $50B valuation, is a strong candidate for 2025. CRM, up a third YTD, is another. Investors are split on $30B TSLA, but Elon Musk dreams big. We are not confident about big cable’s ability to maintain broadband dominance, but CMCSA and its investors are. On the flip side, we are bullish outliers about TWTR, although it’s a big stretch to see it as cracking the top 10. LNKD is clicking along, but is a bit too narrow to be top 10.  Finally, the perpetually “just around the corner” IoT market will likely be real by 2025 – will a chipmaker like QCOM or AVGO be able to exploit that big potential market?

How about a Unicorn? With the huge population of private companies with $1B+ valuations of $1B, some of them will likely emerge as contenders. Uber is obvious, already valued at $60B+. Short term sublet pioneer AirBnB and security data analytics leader Palantir each carry private valuations of greater than $20B. Secretive Magic Leap has financing at a modest $2B valuation, but, if the buzz around its augmented reality tech pans out, it could be huge. Cloudera and Docker are ambitious enterprise IT cloud technology plays. Slack is a red hot enterprise messaging and collaboration cloud application.

Drumroll Please. We expect GOOG, AMZN and MSFT to be the top 3 in 2025, with AAPL holding on for 4th place, just ahead of Uber, FB and NFLX.  M&A will likely play a significant role in determining the last 3 – a IoT chip roll-up, or an enterprise SaaS/cloud tools play seem strong possibilities. In that context, we will put CRM on the list, even though we see some near term issues. We think DIS may have recovered from the ESPN pain by 2025. The last name is a flyer, but let’s go with Magic Leap.

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