Big Tech leaders Twitter (NYSE:TWTR), Facebook (NASDAQ:FB) and Amazon (NASDAQ:AMZN) are taking a hit this week as companies continue to navigate the chaotic events at the U.S. Capitol. With accusations of censorship, de-platforming and antitrust violations swirling, what do investors need to know? And what does the slump mean for TWTR, FB and AMZN stock in the long term?
Following what happened in the Capitol, lawmakers are increasingly pushing to remove President Donald Trump from office. In fact, lawmakers in the House of Representatives are voting on a resolution that calls on Vice President Mike Pence to invoke the 25th Amendment. If the resolution passes and Pence chooses not to comply, Democratic leaders say the House will discuss starting the impeachment process tomorrow. Importantly, Democrats have already introduced an article of impeachment.
However, lawmakers are not the only ones working to respond quickly. Big Tech companies are also under pressure. Twitter chose to permanently suspend Trump from its platform. Facebook, facing the same dilemma, chose to at least temporarily suspend the president. Amazon, whose AWS provided support for Parler, also participated in the de-platforming. As of yesterday, the conservative-friendly site no longer will receive support from Amazon Web Services. In response, Parler has filed a lawsuit against the tech giant.
Investors are just not sure what to do. On one hand, companies want to escape blame for any violence. On the other, there are concerns about maintaining user bases and avoiding tricky issues of free speech and censorship.
So how should investors view FB, TWTR and AMZN stock?
Big Tech News: The Path Forward
Is this the death of Big Tech? Scott Galloway, a professor of marketing at the NYU Stern School of Business, thinks so. Following the Capitol chaos, Galloway said it was a bad sign that the first response was begging tech CEOs to de-platform Trump and his supporters. As he told Yahoo Finance:
“I’d like to think that this is the beginning of the end of Big Tech as we know it. I think this is another example that when you have algorithms that are profit-driven, and these algorithms are different, and figure out the tribalism, and dividing us, is very profitable. And it ends up in an overrun or a seizure of the U.S. Capitol.”
However, not everyone agrees. InvestorPlace analyst Luke Lango points to what happened with Nike (NYSE:NKE) just a few years ago. Nike ran a campaign with Colin Kaepernick. Investors panicked that NKE stock would quickly suffer. Instead, Democrat-supporting customers were energized, supporting Nike more than ever before. The amount of customers alienated pales in comparison to these newly engaged customers.
Following this logic, Lango thinks Facebook, Twitter and AMZN stock will emerge unscathed. Essentially, these companies are deeply embedded in our daily life. Even if they lose customers as a result of the Trump de-platforming, many will hang around. For investors then, that means there is no reason to panic.
InvestorPlace Markets Analyst Tom Yeung has a different perspective — treat what is happening right now with Big Tech as an opportunity to find under-the-radar plays. Is there a micro-cap company that will be the next Parler? What messaging platforms are out there that will soon attract new users? If investors can find those stocks, they could ride a new wave of influence in the tech world.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.
