The technology and the consumer cyclical sectors are among the worst performers in the past year, losing between 30% and 38% of their value. Companies in those two sectors are particularly sensitive to rising inflation and a higher cost of capital, while many suffer from bottlenecks among the supply chains, as well as headwinds caused by pandemic-related restrictions, geo-political tensions between the US and China, and the ongoing war in Ukraine. Looking at more specific groups, the consumer electronics industry has shown to be more resilient in the past year, while only marginally recovering in the past few weeks, whereas other industries set up for a stronger rally. The internet retail industry has instead been among the weakest laggards in the consumer cyclical sector, losing close to 47% in the past year, and continuing to show relative weakness also in the most recent weeks.
The two selected companies are two global giants in their relevant industries. Despite Apple (NASDAQ:AAPL) still heavily relying on its iPhone sales, the company is progressively diversifying its revenue stream through other sources of income, such as its Mac products, wearables, and home devices, but most of all from its service business.
As I discussed in this article, Amazon.com (NASDAQ:AMZN) is increasingly penetrating the global online advertising business, eroding the duopoly formed by Alphabet (NASDAQ:GOOG) (GOOGL) and Meta Platforms (NASDAQ:META), with a rather conservative estimated revenue of $38B for the current year, while also other emerging competitors such as Alibaba (NYSE:BABA), Tencent (OTCPK:TCEHY), or ByteDance through their social media TikTok, are aggressively gaining market shares.
The global consumer electronics market is expected to grow at a 5.1% Compound Annual Growth Rate [CAGR] through 2030, expanding to a total value of $1.13T, driven by broader adoption of technologies such as…
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