Two Weak Spots in Big Tech Economics: Doctorow on Valuation Disparities
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Summary
Cory Doctorow's daily links post focuses on two weak spots in Big Tech economics: the massive disparity between Big Tech's scale and its inflated valuations. He highlights how companies like Amazon have price-to-earnings ratios (37.65) that far exceed traditional retailers like Target (13.34), meaning investors value Amazon's dollars three times more. The article argues that Big Tech stocks trade at unsustainable premiums, pointing to fundamental economic vulnerabilities beneath their enormous scale.
Key quotes
· 3 pulledBig Tech's astonishing scale is matched only by its farcical valuations – price-to-earnings ratios that consistently dwarf the capitalization of traditional hard-goods businesses.
Amazon's price-to-earnings ratio is 37.65; Target's is only 13.34.
That means that investors value every dollar Amazon brings in at three times the value they place on a dollar spent at Target.
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