Top 20 Most Profitable Tech Companies in the World
In this article, we will be taking a look at the top 20 most profitable tech companies in the world. To skip our detailed analysis, you can go directly to see the top 5 most profitable tech companies in the world.
The tech industry may be one of the biggest industries in the world, but 2022 was a disastrous year, with the Dow Jones U.S. Technology Index, an index which tracks tech companies in the country, down over 35% as opposed to a 20% decline in the S&P 500. While tech companies saw share prices jump astronomically during the Covid-19 pandemic and also post recovery, resulting in many major tech companies going on hiring sprees. However, 2022 was a year full of uncertainty, resulting in the worst first half in more than half a century for stocks in the U.S., as economic uncertainty and inflation resulted in increasing pressure on earnings and stock performance, while higher interest rates to battle rising inflation only increased the strain on stock returns. War between Russia and Ukraine simply added to a tumultuous year, all of which combined to see 2022 become the first year in which the NASDAQ, on which several of the most profitable tech companies in the world are listed, drop in value in four quarters.
Meta Platforms, Inc. (META) alone lost around tw0-thirds of its entire value, a lot of it predicated on the belief that the metaverse is failing, which is not good news for some of the biggest metaverse companies in the world. Amazon.com, Inc. (NASDAQ:AMZN), another major tech company, though surprisingly not among the most profitable tech companies, had losses in the trailing twelve months. IPOs have also declined as companies which have had IPOs recently haven't performed too well in the stock market, as opposed to the most profitable tech companies in the world.
Photo by Possessed Photography on Unsplash
All of this has led to tens of thousands of job cuts across major and minor tech companies, with almost all major companies significantly reducing headcount, reversing hiring sprees carried out at the height of the pandemic. However, that doesn't mean that it's all doom and gloom for tech investors. NVIDIA Corporation (NASDAQ:NVDA), which has branched into AI, purportedly the next big thing in tech, has seen its stock price jump over 170% in just 2023, and breached the trillion dollar mark in the same year. Alphabet Inc. (NASDAQ:GOOG) saw its stock price increase by a more modest but still significantly healthy 37% while Apple Inc.'s (NASDAQ:AAPL) stock price jumped by nearly 45%.
One of the reasons behind this recent increase in tech stock prices is the AI craze, which may have been going on for a few years, but has reached the next level towards the end of 2022, driven by the release and success of ChatGPT and the hope of less aggressive interest rate hikes by the Fed. NVIDIA Corporation's (NASDAQ:NVDA) brilliant earnings report cemented its position as the global AI leader while other tech companies are also making significant investments in the artificial intelligence sector. According to Victoria Greene, the Chief Investment Officer in G Squared Private Wealth "“Being concentrated in these mega-cap tech stocks has been where to be in this market. You cannot deny the potential in AI, you cannot deny the earnings prowess that these companies have.” Meanwhile, the CFO of NVIDIA Corporation (NASDAQ:NVDA) stated in the company's Q1 2023 earnings call "Record revenue of 4.28 billion was up 18% sequentially and up 14% year on year on strong growth of our accelerated computing platform worldwide. Generative AI is driving exponential growth in compute requirements and a fast transition to NVIDIA accelerated computing, which is the most versatile, most energy-efficient, and the lowest TCO approach to train and deploy AI. Generative AI drove significant upside in demand for our products, creating opportunities and broad-based global growth across our markets. Let me give you some color across our three major customer categories: Cloud service providers or CSPs, consumer internet companies, and enterprises."
While there is some concern that artificial intelligence is growing too quickly and poses a threat to humanity, as outlined in a letter written by industry leaders, including Geoffrey Hinton and Yoshua Bengio, who are considered the "godfathers" of artificial intelligence. All of this goes to show that investors who have suffered in 2022 are now seeing returns on their investment in 2023, and this increase in profits is likely to continue in at least the immediate future. Right now, the top four performing companies in the S&P 500 index are all tech companies, including some of the most profitable tech companies in the world, which has led to the Nasdaq increase 25% overall in YTD 2023, far outperforming the S&P 500 index which has returned 9.5% YTD and the Dow Jones Index, which has returned -0.2% in the same time period.
Methodology
To determine our list of the most profitable global technology companies, we first consulted the Fortune Global 500 list and highlighted the top 30 companies with the highest profits. We then checked the latest trailing-twelve-month (TTM) profit from continuing operations for each company from Yahoo Finance, to exclude any one-offs which don't truly reflect a company's operations or profits. For companies which had profits in foreign currencies, we converted them to USD based on the latest exchange rates. For Huawei, which is not listed, we obtained its net profit from its annual report. We then sorted the list from highest profits to lowest. Together, these companies have earned nearly $450 billion in net profits alone.
20. HP Inc. (NYSE:HPQ)
Total TTM profit (in millions): $2,604
HP Inc. (NYSE:HPQ) is one of the biggest manufacturers of laptops in the world. Despite a terrible 2022, HP Inc. (NYSE:HPQ) has recovered somewhat, gaining double digits in stock price in 2023 alone.
19. Hitachi
Total TTM profit (in millions): $3,049
Hitachi is a major Japanese tech corporation with a presence in robotics, AI, automation, elevators and escalators among other items.
18. NVIDIA Corporation (NASDAQ:NVDA)
Total TTM profit (in millions): $4,368
The best-performing company in the S&P 500 index is NVIDIA Corporation (NASDAQ:NVDA) which has gained nearly 170% in 2023 alone. NVIDIA Corporation's (NASDAQ:NVDA) performance and establishment as the AI leader is extremely important for where the tech industry is headed in the future.
17. Hon Hai Precision Industry
Total TTM profit (in millions): $4,756
Hon Hai Precision Industry is one of the biggest private employers in the world with more than 1.3 million employees, and is a manufacturer for many of the most profitable tech companies in the world including Apple Inc. (NASDAQ:AAPL), Sony Group Corporation (NYSE:SONY) and Microsoft Corporation (NASDAQ:MSFT).
16. Sony Group Corporation (NYSE:SONY)
Total TTM profit (in millions): $6,602
Among the biggest companies in Japan, Sony Group Corporation (NYSE:SONY) is engaged in the production of various consumer electronics, including televisions, phones, earphones, headphones and cameras among others.
15. Accenture plc (NYSE:ACN)
Total TTM profit (in millions): $6,939
Accenture plc (NYSE:ACN) is a professional services company among the the biggest Irish companies, and specializes in IT services and consulting.
14. Thermo Fisher Scientific Inc. (NYSE:TMO)
Total TTM profit (in millions): $6,950
One of the biggest healthcare companies in the world by market cap, Thermo Fisher Scientific Inc. (NYSE:TMO) has combined tech with healthcare successfully to carve its place in the healthcare industry. While most of Thermo Fisher Scientific Inc.'s (NYSE:TMO) revenues in the previous year were derived from Covid testing, the company's other core businesses have more than offset the decline in revenue from Covid testing in2022.
13. SK Hynix
Total TTM profit (in millions): $7,202
The most profitable tech company in South Korea, SK Hynix supplies flash memory chips and random-access memory chips. According to Fitch, SK Hynix may be impacted by recent U.S.-China tensions, though the impact is not likely to last long.
12. Intel Corporation (NASDAQ:INTC)
Total TTM profit (in millions): $8,014
One of the most popular semiconductor companies in the world, Intel Corporation (NASDAQ:INTC) has recently been in the news for Germany refusing extra funds for the development of a new chip plant. Even though Intel Corporation (NASDAQ:INTC) has lost 17% in the last year in share price, the company has actually gained 17% in YTD 2023, and is among the most profitable tech companies in the world.
11. Oracle Corporation (NYSE:ORCL)
Total TTM profit (in millions): $8,373
One of the largest software companies in the world, Oracle Corporation (NYSE:ORCL) is also attempting to move into AI, attempting to compete with Microsoft Corporation (NASDAQ:MSFT) by working with Cohere, an AI startup. Oracle Corporation (NYSE:ORCL) is also attempting to use the company's AI capabilities for its supply chain management and human resources apps.
10. Cisco Systems, Inc. (NASDAQ:CSCO)
Total TTM profit (in millions): $11,302
Cisco Systems, Inc. (NASDAQ:CSCO) is a digital communications technology giant and is also making inroads into AI, developing an AI-first security cloud.
9. QUALCOMM Incorporated (NASDAQ:QCOM)
Total TTM profit (in millions): $11,860
QUALCOMM Incorporated (NASDAQ:QCOM) is among the biggest semiconductor companies in the world and is most well-known for producing chips for cellphones, with many believing that QUALCOMM Incorporated (NASDAQ:QCOM) has even overtaken Apple in smartphone AI.
8. Huawei Technologies
Total TTM profit (in millions): $5,180
One of the most profitable tech companies in the world, Huawei Technologies manufactures telecom equipment and consumer electronics. However, the company has faced sanctions from the U.S. on charges of spying on countries with its devices for China, and accusations of assisting the mass surveillance and detention of Uyghurs in internment camps in China, resulting in its biggest ever profit drop to $5.9%, a 69% decline year on year.
7. Meta Platforms, Inc. (NASDAQ:META)
Total TTM profit (in millions): $23,200
One of the best performing tech companies in 2023, Meta Platforms, Inc. (NASDAQ:META) has more than doubled its value in 2023. After a terrible 2022 where Meta Platforms, Inc. (NASDAQ:META) lost two-thirds of its value, the company has come back in a massive way recently, which may have positive indications for the metaverse.
6. Tencent Holdings
Total TTM profit (in millions): $26,406
The most profitable tech company in China, Tencent Holdings is also among the biggest gaming companies in the world.
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Disclosure: None. Top 20 most profitable tech companies in the world is originally published at Insider Monkey.