When you think of the 10 biggest companies in the world, you likely think of the big oil and car companies. And you’d be right.
The Fortune Global 500 2016 top 10 companies include five oil giants, two automakers, one retailer and one utility provider. The last one may surprise you, though it’s one of the most recognisable tech companies. I’m talking about Apple Inc. [NASDAQ:APPL].
That’s right, in July, Apple made it on to the Fortune 500 top 10 companies for the first time ever. I doubt it will be the last time a tech company joins the ranks.
I would argue that the technology sector is one of the most important going forward. And I’m not just talking about its importance for investors.
Tech companies are usually the ones pushing to innovate. They create new, more efficient ways of doing things. They propel our society forward to help us achieve more and live happier, longer lives.
For example, look at the development in driverless vehicles. This idea will change how we think about transport forever. Forget cars on the roads. Think of pods traveling anywhere you want to go, and having facilities for you to work or play en route.
First, driverless cars were a plaything for tech giants like Google. But now, companies are talking about bring them to our roads by 2021.
And this is just one development the tech industry is working on. It is also developing whole new ways to communicate, construct and learn. Tech companies pretty much do it all.
This is why governments are so eager to help out their own tech industry. More innovation, job creation and efficiency — it’s the recipe for a greater nation.
So you could probably think of a million reasons why Donald Trump should sit down and chat with America’s tech moguls. Well, that’s exactly what he did on Wednesday.
Technology giants warming up to Trump
Jeff Bezos, CEO of Amazon.com, Inc. [NASDAQ:AMZN], and Elon Musk, CEO of Tesla Motors Inc. [NASDAQ:TSLA], among others, sat down with Trump to discuss job creation. This is something Trump already has a lot of experience with.
Throughout his campaign, Trump had no strong policies on technology or tech start-ups. It was no secret that the tech industry was backing Hillary to win.
According to CNBC, ‘The tech industries A-list gathered at the Web Summit, digesting the outcome of his shock victory. On the Wednesday, the mood was sombre, a far cry from the energy that raced through the conference on the previous day.’
Silicon Valley’s contributions to Hillary’s campaign were 114 times that of Trump’s. And as Bloomberg explained, tech investors weren’t so happy about Trump winning, either.
‘The election of Donald Trump has been stock market manna for every industry that benefits from an expanding economy but one: technology.’
However, slowly but surely, the technology industry seems to be warming up to president-elect Trump.
Peter Thiel, co-founded PayPal Holdings Inc. [NASDAQ:PYPAL], is one of Trump’s biggest supporters. He is also one of Donald’s most trusted advisers. Thiel has a reputation for being a contrarian. But he’s not just going against the grain by backing Trump. He lends his support because of the big things Trump gets right, like, for example, his stance on trade:
‘…free trade has not worked out for all of America. It helps Trump that the other side just doesn’t get it. All of our elite preach free trade. The highly educated people who make public policy explain that cheap imports make everyone a winner according to economic theory. But in actual practice we’ve lost tens of thousands factories and millions of jobs to foreign trade, the heart land has been devastated.’
Sharing economy giant Airbnb also has no concerns about president-elect Trump. Chris Lehane, head of Airbnb public affairs and former political consultant, believes:
‘For us, whether it’s a Democrat or a Republican [in the White House], left, right, one of the issues both sides talked an awful lot about during the election was the middle class. The Airbnb platform is a platform for the middle class. For everyday families it is generating that supplemental income.’
Lehane went on to say, ‘I think someone who has talked about how you help the middle class out, I think we feel pretty good that our value proposition here is something that makes an awful lot of sense.’
Even the richest man in the world, Bill Gates, is upbeat on president-elect Trump. The two billionaires had a ‘wide-ranging conversation about the power of innovation.’ After stopping in the lobby of Trump Tower, Gates told a CNBC reporter:
‘We had a good conversation about innovation — how it can help in health, education, impact of foreign aid and energy.’
But innovation wasn’t the only topic of discussion. The top tech CEOs were eager to discuss the recovery of overseas earnings.
The one answer that really matters
The top US tech companies collectively have hundreds of billions of dollars overseas. Obviously they would like that money to return home at a beneficial tax rate.
After the meeting on Wednesday, most tech CEOs declined to comment on details about the meeting. But the topic of bringing earnings back to the US could be somewhat of a give and take with Trump. While he wants American businesses to do well, additional tax revenues could help advance his infrastructure programs.
It’s a decision for Trump which could significantly change the US tech sector. If the tax rate is unfavourable for tech companies, you’ll likely see tech stocks tumble overnight. If Trump decided to do the opposite, it could see the NASDAQ jump overnight.
Overall the meeting was ‘very informative and productive, and President-elect Trump and his team were extremely engaged,’ a Cisco spokeswoman said.
It was one of Trump’s most important meetings yet, in my opinion. And if you’ve got tech stocks in your portfolio, you’ll probably want to know the details of Trump’s meeting and America’s tech elite.
Junior Analyst, Money Morning