Despite once being an executive at Facebook, Chamath Palihapitiya — now the CEO of Social Capital Hedosophia Holdings — said that he favors investing in Amazon instead of Facebook and Google.
President Trump might disapprove of Amazon (NASDAQ:$AMZN), but Palihapitiya said that he believes both Facebook (NASDAQ:$FB) and Google (NASDAQ:$GOOGL) face more regulatory risk, seeing as many retailers compete with Amazon.
“Amazon is a microscopic portion of global consumption today, so ultimately I think it has more room to grow before it invites regulatory overview,” CEO Palihapitiya said. “On the other hand, Facebook and Google effectively are surveillance states. And they have so much personal, private information about so many citizens of so many countries.”
For those who don’t know, Google has already had a bit of a tussle with regulators in Europe. Why? The company was hit with a record fine in one investigation.
“It’s already beginning,” Palihapitiya said. “Because it’s part and parcel to them realizing that there’s too much power unbounded.”
Further, Palihapitiya said that major tech companies are starting to see their stocks fly, which makes it tempting to take gains. It is worth mentioning that Palihapitiya’s holding company hit the public markets on Thursday.
However, he believes that investors need to reconsider the way they think about the long-term course of the companies. For example, Amazon is currently competing with Wal-Mart (NYSE:$WMT), but because it has tools like Alexa, robots, and cloud, Amazon’s technology is likely to have a victory over “laggard competitors,” Palihapitiya said.
“It is competing against fundamentally impaired companies, including Wal-Mart, quite honestly,” Palihapitiya stated. “That don’t have the technical savvy, they don’t have the capabilities, specialty retailers, an entire overhang of cost structure that [Amazon doesn’t] have to deal with.”
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