Facebook, China and dividend payers boost global tech
SAN FRANCISCO -- We signaled here in March that Facebook was likely to pass IBM in 2014 on the list of most valuable technology companies in the world.
It did, after shares of the social network (FB) surged 44% and IBM stock (IBM) dropped 13% last year.
Yet Facebook's significant move up wasn't the biggest stock-market hit among the world's 20 most valuable tech firms.
Year-end stock market data point to the two most valuable winning stories of 2014 for tech investors.
The first was the relative strength of dividend-paying stocks such as Apple, Intel, Hewlett-Packard, Cisco Systems and Microsoft.
The second was a marked shift in value away from U.S. Internet firms (other than Facebook) and toward their Chinese rivals.
The surge in market capitalization among those big names helped drive the aggregate value of the world's 20 most valuable tech companies higher by $870 billion.
The 20 most valuable global tech stocks, by market cap, are now worth $3.6 trillion.
As measured by their change in U.S. market capitalization, Alibaba and Apple enriched their shareholders the most in 2014.
Tech investors who held Apple (AAPL) the last 12 months reaped a massive $253 billion aggregate gain in value.
The hardware maker's stock rose 40%, even though sales growth slowed, as CEO Tim Cook and the Apple board boosted dividend payments.
Almost as large last year was the value that investors added to the market cap of Alibaba (BABA), thanks to the online retailer's September IPO.
The China-based giant led by CEO Jack Ma staged the largest stock offering in history.
Alibaba ended 2014 as the world's fourth most valuable tech firm, with a market cap of $251 billion.
That put it behind only Apple, Microsoft and Google, as we surmised might happen just before the IPO.
BIG BLUE COMES UP SHORT
Facebook ended 2014 as No. 5, valued at $215 billion, just ahead of Oracle (ORCL) and Verizon (VZ) and well ahead of IBM, which slid from No. 4 to No. 11 on the list.
Big Blue shares lost 13%, wiping out $21 billion in market cap, as investors have yet to buy into CEO Ginni Rometty's strategy.
The new Global Tech 20 list shows where tech investors held their biggest stock bets as the new year began, and Alibaba wasn't the only China-based online firm to find favor with global investors.
Shares of Tencent Holdings (OTC: TCEHY) rose 13%, and the Alibaba rival ended 2014 valued at $129 billion, good for No. 14 on the list.
Meanwhile Baidu (BIDU), China's No. 1 Internet search provider, saw its shares surge 28%.
It's now worth $76 billion, making it the world's 17th most valuable tech firm.
Tencent and Baidu together added $38 billion in market cap.
To get an idea of where some of the money flowing into Chinese Internet stocks may have come from, look at a 2014 stock chart for Google (GOOG) and, most especially, Amazon.
Even as the Nasdaq Composite rose 13%, shares of Google slid 5%.
Revenue growth at the Internet search giant is now less than half that of Facebook, its key rival in the market for online advertising.
Amazon shareholders fared even worse as its stock dropped 22%, the most of any of the 20 largest tech firms.
The online retailer's historically thin profit margins evaporated and turned to losses amid heavy spending by CEO Jeff Bezos on everything from drones to original programming.
After shedding more than $31 billion in market cap, the Seattle-based company ended 2014 worth $141 billion, or 12th most valuable.
The rise in valuations among China Internet companies made Alibaba, Tencent and Baidu worth more than long-established U.S. companies such as Hewlett-Packard (HPQ), eBay (EBAY) and Priceline.com (PCLN).
Don't cry for H-P shareholders, however, as the value of their shares skyrocketed 48%, the best stock performance on the list.
Cheered by CEO Meg Whitman's plan to split up the company, investors added $35 billion to the company's value.
The PC and printer giant finished the year worth $75 billion, good for No. 18 on the list.
Microsoft (MSFT) shareholders also scored big as investors liked what they heard from new CEO Satya Nadella.
The stock rose 25%, adding a hefty $97 billion of market worth and placing the software giant ahead of Google, which began 2014 as the more valuable company.