👑 Company of the Year
Your votes are in! These 5 businesses shaped 2023
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Thank you to the hundreds of subscribers who participated in our recent poll and voted for their 👑 Company of the Year 2023.
The results are in! And it was not even close.
Let's dive into the countdown from 5th to 1st place.
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5. 💬 Meta: The Year of Efficiency
Facebook's parent company earned only 7% of the votes. But what a year it has been.
Remember November 2022, when Meta’s stock was more than 75% off its peak?
At the time, the losses from Reality Labs (VR hardware and software) ballooned to $4 billion, causing margin compression. Investors urged Meta to cut headcount expenses and reduce annual capex.
A year later, Meta's story took a dramatic turn. In 2023, Zuckerberg's mantra wasn't "move fast and break things," but "efficiency, efficiency, efficiency."
And guess what? It's working. The stock has nearly tripled since then.
🔎 A Leaner Organization: 2023 marked Meta's shift towards efficiency, with two rounds of layoffs leading to a more streamlined organization. The result? Reduced bureaucracy, quicker decision-making, and a 20 percentage point rise in operating margin (see visual).
🤖 Open Source AI: Diverging from rivals like AWS and GCP, Meta embraced open-source AI models like LLaMa. This year, they doubled down on AI initiatives, from recommendations on the platform to better ad performance (boosting engagement and conversion).
🎥 Reels Turns Revenue Neutral: Video content now accounts for half the time users spend on Facebook and Instagram. The short video format has driven a 40% increase in time spent on Instagram and monetizes like the rest of the platform after initially trailing.
🥽 Reality Check: The metaverse vision remains a work in progress. Even Zuckerberg admits mainstream adoption is still years away. According to industry analyst Ming-Chi Kuo, the Meta Quest 3 had a relatively weak launch. The release of Apple Vision Pro in 2024 could bring more attention to the technology.
💬 Messaging: WhatsApp's click-to-message ads have propelled the platform to a "multi-billion dollar annual run-rate," showcasing its revenue-generating potential. AI agents for entertainment or customer support could be a massive tailwind, given Meta’s reach of 3 billion people.
🧵 Threads: Instagram Threads, Meta's foray into microblogging, hit a remarkable 100 million downloads shortly after launch in July. Business Insider said Threads crossed 33 million Daily Active Users in October, but the financial impact could take a while to materialize.
🚧 Challenges Remain: Despite its strides in efficiency and innovation, Meta still navigates a sea of challenges, including privacy scrutiny, an evolving regulatory landscape, and stiff competition from TikTok to YouTube. How Meta responds to these challenges and adapts will be critical to its ongoing success and ability to maintain its newfound momentum.
Click the link below for our full review of Meta’s latest quarter, including user trends.
4. 🚀 SpaceX: Skyrocketing Valuation
I’ve been watching the show Foundation on Apple TV+ recently.
Did you know Elon Musk’s plans for SpaceX are inspired by science fiction, particularly Isaac Asimov’s Foundation saga?
SpaceX is the world's second most valuable private company, trailing only behind ByteDance (TikTok’s parent), with a potential valuation of $180 billion reported by Bloomberg this week.
Its private status makes the company challenging to research. So, we shared our step-by-step guide for analyzing private companies like SpaceX in a recent video on our YouTube Channel. We break down SpaceX's founding story, its products, and unpack Starlink's market strategy!
🚀 Launch Frenzy: With a record 92 rocket launches this year, SpaceX has drastically outperformed industry averages, reaffirming its status as the premier global launch provider.
🛰️ Starlink Soars: Achieving over 2 million subscribers and deploying more than 5,000 satellites, Starlink is on track to fulfill its global internet coverage ambitions, potentially generating $30 billion in revenue by 2025.
📡 FCC Setback: The Federal Communications Commission ruled Starlink ineligible for $900 million in rural broadband subsidies, stating it failed to prove its capability to deliver promised services under the Rural Digital Opportunity Fund.
🌌 Starship’s Progress: The successful test flights of Starship, aimed at being fully reusable for Mars missions, demonstrate SpaceX’s commitment to redefining space travel.
💸 Cost Efficiency: Pioneering reusability drives down costs, with Falcon 9 launches significantly cheaper than competitors. Starship aims for a $200/kg launch, further disrupting the industry.
⚙️ Tech Titan: Cutting-edge engines, satellite innovations, and vertical integration keep SpaceX ahead of the curve, attracting top talent and securing NASA contracts.
🌍 Global Impact: SpaceX’s contributions, such as supporting Ukraine with Starlink, extend its influence beyond space endeavors.
🌠 The Future Awaits: Plans for Mars colonization and asteroid mining are just the beginning of what's to come. As SpaceX continues to redefine space travel, it also paves the way for humanity's next grand adventure in the cosmos.
3.💊 Novo Nordisk: Is Ozempic right for me?
Third in the ranking with 13% of the votes was Novo Nordisk
The Danish titan leads the fight against chronic diseases like diabetes, obesity, and rare blood disorders. This year, it became the largest European company, ahead of French conglomerate LVMH.
Check out our 🇪🇺 12 European Giants Visualized for a comprehensive list.
During his Oscars monologue in March, Jimmy Kimmel joked about the injectable prescription drug to lose weight:
“Everybody looks so great. When I look around this room, I can’t help but wonder ‘Is Ozempic right for me?’”
🌟 A Record Year: Novo Nordisk has been on a stellar growth trajectory in the first half of 2023, driven by its GLP-1 (+50% year-over-year) and obesity care drugs (+157% year-over-year). The company reports in Danish Krones in the visual below (1 DKK = ~0.13 EUR).
👑 GLP-1 Kingpin: Novo owns over half the GLP-1 market—a gut hormone that helps regulate blood sugar and appetite—with Ozempic at the forefront. No wonder celebrities and millions worldwide sing its praises.
🕰️ Decades of Dedication: While others gave up, Novo persevered in GLP-1 research for years, leading to their current success and paving the way for better obesity treatments.
📈 Scaling Up: To meet global demand, Novo plans to invest $6 billion in expanding production, ensuring everyone can access this life-changing medication.
🚥 Beyond the Buzz: Ozempic is just the beginning. Novo's pipeline and recent acquisitions in cardiovascular and other areas promise a future of diverse, impactful treatments.
2.☁️ Microsoft: OpenAI, Azure and Activision
Microsoft earned the second place with 23% of your votes.
The company has been at the forefront of the AI craze, notably with the launch of Microsoft Copilot. Piper Sandler called Copilot an “iPhone moment” for Microsoft, comparable to the transition to the cloud that started in 2008.
🤝 OpenAI Partnership: Building on their $10 billion investment, Microsoft unlocked the power of OpenAI's cutting-edge large language models like GPT-4 and the AI image generation model Dall-E 3, integrating them into Azure and Microsoft 365 and transforming the user experience.
☁️ Azure Ascends: Microsoft solidified its position as the second-largest cloud provider. Azure continues to outpace the market, capturing critical market share. Microsoft Cloud now represents 56% of the company’s total revenue. Azure, part of Intelligent Cloud, was the fastest-growing segment in Q3 at 28% year-over-year, a reacceleration.
Copilot: Microsoft 365 Copilot launched in November. It adds generative AI features like summarizing documents, generating emails, and speeding up Excel analysis. Analysts estimated Copilot could add up to $14 billion in annual revenue.
🎮 Activision Blizzard Acquisition: With a $69 billion deal, Microsoft becomes the world's third-largest gaming company, poised to reshape the industry with franchises like Call of Duty, Overwatch, and Candy Crush.
💵 Subscription and cloud gaming: Game Pass is about to get a massive boost from this merger. Microsoft gives access to first-party games at no additional cost. Meanwhile, these games will cost $60 to $70 on a PS5. So, the best choice for consumers will be obvious. It could also make Game Pass Ultimate and its access to XBOX Cloud gaming more compelling.
👨🏽🦲 Satya Nadella’s leadership: From OpenAI’s integration to securing Activision, Microsoft’s CEO is having a moment. His testimony in the US v. Google trial shows he can go on offense. This approach could prove crucial as the new AI supercycle redistributes the cards.
1.🥇 NVIDIA: Company of the Year
And the winner is… NVIDIA! With 46% of the votes, twice as much as Microsoft, the closest contender. If that’s not a landslide, I don’t know what is!
For one thing, the stock has more than tripled this year. But we want to look beyond the stock performance to reflect on NVIDIA’s incredible year.
Our review of the latest quarter covered how NVIDIA is positioned as an AI factory with advancements for 🎓 training and 🧠 inference workloads.
💰 Record Revenue Growth: NVIDIA reported revenue of $18 billion in Q3 FY24, more than tripling year-over-year.
🏢 Data Center dominance: Data Center revenue nearly quadrupled year-over-year to $14.5 billion, making up 80% of overall revenue and indicating strong demand for GPU platforms due to the surge in demand for generative AI and large language models (LLMs).
🆚 Competition Spurs Innovation: While AMD, Intel, and Qualcomm are vying for a share of that pie, NVIDIA's relentless innovation and strategic vision keep them ahead of the curve, constantly pushing the boundaries of what's possible.
🤝 Strategic Partnerships: Beyond expanding existing ties with leading cloud providers like AWS, Azure, and GCP, the company ventured into diverse collaborations. From Hugging Face's Training Cluster as a Service to Genentech's drug discovery, NVIDIA embraced open dialogue and joint innovation, leveraging its accelerated computing expertise to empower partners across industries.
🕹️ Gaming Segment Resurgence: The Gaming segment showed a significant rebound, driven by the success of RTX GPUs based on the Ada Lovelace architecture.
⚙️ Innovative Product Launches: The company introduced the NVIDIA H200, its fastest AI chip, and Spectrum-X, an Ethernet networking platform, showcasing NVIDIA’s commitment to leading-edge technology.
🌐 Omniverse Expansion: NVIDIA's ecosystem expands beyond GPUs. Omniverse, a virtual collaboration platform, and AI Enterprise software suite show they're building the tools for companies to develop their own AI empires.
🌍 Global Footprint Expands: Export restrictions present hurdles, but NVIDIA's global reach remains unmatched. They're venturing into new markets and diversifying their supply chain.
🌊 Riding the AI wave: NVIDIA isn't just riding the AI wave. They're building the surfboards. Their relentless product releases result from years of innovation in the AI space. It makes them the undisputed Company of the Year 2023.
Now it’s your turn! Which company would you add to this list? And why?
Share your thoughts and reasons in the comments below.
That’s it for today!
Stay healthy and invest on!
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Disclosure: I am long META and NVDA in the App Economy Portfolio. I share my ratings (BUY, SELL, or HOLD) with App Economy Portfolio members.
Author's Note (Bertrand here 👋🏼): The views and opinions expressed in this newsletter are solely my own and should not be considered financial advice or any other organization's views.