How Big Tech became such a big target on Capitol Hill


  • The five U.S. tech giants are now valued at about $7 trillion, up from $2 trillion five years ago.
  • As lawmakers made clear in a report released this week, they view Big Tech as having dangerous monopolistic power that needs to be checked.
  • A number of things have taken place in the past decade that turned the Silicon Valley-Seattle corridor into a target for Washington politicians.

Mark Zuckerberg wearing a suit and tie: Facebook Chief Executive Mark Zuckerberg walks past members of the news media as he enters the office of U.S. Senator Josh Hawley (R-MO) while meeting with lawmakers to discuss

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Facebook Chief Executive Mark Zuckerberg walks past members of the news media as he enters the office of U.S. Senator Josh Hawley (R-MO) while meeting with lawmakers to discuss

After a 16-month investigation into competitive practices at the largest U.S. tech companies, Democratic congressional staffers laid out their findings this week in a 449-page report. They concluded that Apple, Amazon, Facebook and Google enjoy monopoly power that needs to be reined in, whether that means breaking the companies up, blocking future acquisitions or forcing them to open their platforms.


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Wall Street shrugged at the news. Three of the four stocks rose the day after the report’s release, reflecting investors’ long-held view that regulators and politicians are in no position to squelch Big Tech’s continuing rise and market share expansion.

Still, lawmakers certainly aren’t putting the matter to rest. And with Joe Biden carrying a commanding lead in the polls less than a month before the Nov. 3 election, tech companies face the possibility of Democrats controlling the White House and both branches of Congress in 2021.

Should Democrats win the Senate, it would put Elizabeth Warren and Bernie Sanders, who are among the loudest voices calling for the break up of Big Tech, in the majority.

Here’s what Warren had to say in early 2019:

“Today’s big tech companies have too much power — too much power

Morgan Stanley Analysts Reiterate $245 Price Target, See Promising Future in Microsoft’s Gaming Business


On Thursday, Morgan Stanley analysts reiterated their Overweight rating on Microsoft (MSFT) with a $245 price target. The analysts see great upside for Microsoft ahead of new Xbox console launches and following the $7.5B acquisition of game developer and publisher Bethesda Softworks.

The long-awaited release of the Xbox Series X/S console is approaching quickly. As expected, Microsoft should experience an uptick in hardware sales driven by the increase of “work/stay/play at home” activities from consumers. “The increase in gaming hardware revenue in FY21 vs.FY20 of $779 million in our model is already pressuring our existing FY21 gross margin estimates by ~35bps”, stated by Morgan Stanley analysts.

The analysts further noted: “Microsoft’s revenue base has grown meaningfully since (MSe $156 billion revenue in FY21 vs $110 billion in FY18), thus making the margin dilutive effect less meaningful now, in our view. Despite this modest gross margin headwind, we look for FY21 gross margins to expand YoY to 69%, ahead of consensus at 68.3%.”

Gross margin fears shouldn’t be as bad as feared with the analysts commenting that “broader gross margin expansion in FY21 remains underappreciated”. FY21 Gross Margins will benefit from accounting changes and continued Azure improvements.

The accounting changes include a ~$2.7 billion benefit to COGS from lower depreciation expenses in FY21. This will tackle Commercial Cloud gross margin, a big concern that investors had come into the fiscal year. This will benefit Azure margins in the coming years, estimated to go from 56.2% in 2020 to 65.0% in 2021. Beyond FY21, analysts expect to see a more measurable pace of expansion supported by growth in Dynamics and Gaming Softwares/Services.

In addition, the argument can be made that the $7.5B Bethesda Softworks acquisition is a justifiable price tag. With the growing Xbox Live community and Game Pass ecosystem, Microsoft’s strategy

Cryoport: A Levered Refrigerator Manufacturer Trading At A Tech Multiple, $10 Price Target (NASDAQ:CYRX)


I have written on Cryoport (NASDAQ:CYRX) before, highlighting the total lack of a moat in the base business. Since that report the company has made two acquisitions, in competitive deals, that show the multiple is massively out of whack with what other buyers are willing to pay. In addition the sell side has run the stock up on the theory that CYRX will be a beneficiary of the COVID 19 vaccine distribution effort. This narrative is without merit, Pfizer (PFE) and the CDC have completely discredited the Sellside analysts interpretation here.

Below I will highlight that CYRX has morphed from an oddball ultra cold storage shipping service into a leveraged appliance manufacturer. The upside risk of vaccine distribution is extremely low, and that the likely outcome is that shareholders wake up next year with the realization that they own an appliance company trading at ~92x EBITDA. The downside scenario is significant.

Let’s Not Bury the Lede

CYRX has been repeatedly implicated buy the sell side as a beneficiary of the distribution of vaccines for COVID-19. This is likely because of the reality that the PFE effort needs to be shipped and maintained at -70C. The Moderna (MRNA) vaccine candidate has displayed stability data at -20C and is thus no longer part of the CYRX story, and the other major candidates are stable at even more reasonable temperatures.

Unfortunately for CYRX, PFE recently gave a full webcast about their clinical candidate and included the photo of a cardboard shipper that does not require the liquid nitrogen that CYRX is famous for… but instead simply utilizes dry ice. Perhaps the cardboard box contract exists as an opportunity but I suspect that PFE can handle this simple task on their own

Source: PFE webcast

Furthermore the CDC has informed the universe that they

Global Food Safety Testing Systems and Services Market to 2025 – Focus on Technology, Target Tested and Food Tested


The “Global Food Safety Testing Systems and Services Market: Focus on – Technology (PCR, Immunoassay, ICP, Chromatography), Target Tested (Pathogens, Residues, Allergen) and Food Tested – Analysis and Forecast, 2019-2025” report has been added to’s offering.

The need for food safety originated because of the highly unregulated market, which causes a high number of cases in foodborne illnesses and food recalls. The concern still persists even in current times, with a far more regulated industry that is gaining traction globally. The rising concerns about contamination of food with pathogens and other detrimental elements, has led to a constant need and evolution of the food safety tests at different levels. Also, global concerns and ongoing incidences regarding genetically modified foods, chemical residues, and other similar issues in foods, had a major impact on the policy-making process in different countries.

The globalization in the food industry is the major challenge in the food safety testing market. Different regional regulations and oversight between countries could result in supply chain uncertainty and will also affect the food safety testing industry.

During the forecast period, food safety testing technologies, such as inductive coupled plasma (ICP) technology, are expected to register the fastest growth rate. These technologies in food safety testing find use in various applications in the food and beverage industry and are used to check upon the characteristics of the product, such as type, count, and metabolites of microorganisms which are related to food spoilage, preservation, fermentation, safety, and foodborne pathogens. The increasing rate of adoption of the rapid technology among the food manufacturers and laboratories coupled with the increasing foodborne illness are the factors supporting the growth of the market.

The key players operating in this market have increased the number of mergers & acquisitions over the recent years, to generate public

Amazon Price Target Raised to Wall Street High by Pivotal


Investors and analysts have been framing the Amazon  (AMZN) – Get Report sum-of-the-parts valuation wrong, according to a Pivotal Research analyst, who raised his price target for the internet retail giant to $4,500 from $3,925.

Shares of the Seattle-based Amazon were up 1.6% on Thursday to $3,200.08.

Analyst Michael Levine, who kept a buy rating on the shares, said in a note to clients that Amazon’s advertising was only 5% of revenue, but is a “far greater contributor” to overall non-Amazon Web Services EBIT margins than Wall Street recognizes.

“Said differently,” the analyst said, “if advertising was viewed as a stand-alone business unit … it would represent well north of 300% of 2020E non-AWS EBIT.”

Based on his view that there is “massive upside” to estimates by fiscal year 2024, the analyst increased the firm’s target to a Wall Street-high of $4,500. 

Levine thinks investors are “materially underestimating” the earnings power of the ad business. He called Amazon the “best mega-cap on a multi-year basis.”

“Ironically, AMZN over the last few years has gone from the mega-cap disclosing the least to the one disclosing the most,” he said.

Levine estimated that at least 85% to 90% of the Amazon business today is sponsored listings.

“In this scenario,” he said, “an advertiser pays for higher placement within the sort order, the user stays on AMZN, and AMZN keeps the transaction and transaction data.”

Separately, Jefferies analyst Brent Thill said the company hosted a conference call with a supply chain/logistics expert to discuss the current state of Amazon’s fulfillment network.

Thill, who has a buy rating and a $3,144.88 price target, said increased customer demand is causing Amazon to expand capacity at an unprecedented pace and that expanded same-day delivery could be just 12 months away. 

In addition, he said,