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An amazing 2020 for tech stocks, in charts

The pandemic helped tech stocks to soar. What happens in 2021 is less clear.

Stock market up arrow
Image: Greg Ory/Ataur Rahman/Protocol

For most people, 2020's been a pretty awful year. Over 1.7 million people have died from COVID-19, countless small businesses have been destroyed by lockdowns and we've all gotten much too familiar with our living rooms. But for anyone who owns tech stocks, 2020's at least had a silver lining.

As work, education and retail went virtual, tech stocks of all kinds boomed. Big Tech did particularly well. Take Amazon, which rebounded from March lows to end the year up 74%. And while some commentators thought the economic impact of the virus would hurt a luxury brand like Apple, its shares are up 80%. The wider market, meanwhile, is up just 14%.

Having outperformed the market so significantly, Big Tech has now cemented its hold over the S&P 500. America's five biggest companies — Apple, Microsoft, Amazon, Alphabet and Facebook — now account for almost 20% of the 500-company index. Apple's share alone has increased from 4.6% at the start of the year to 6.8% today.

It's not just Big Tech doing well, either. Over the past decade, the information technology and communication services sectors have steadily grown in size, a trend that only continued this year with the two now making up almost 40% of the S&P 500.

Two stocks stood out above all else. Zoom, rapidly pivoting from a workplace tool to a platform for … basically everything, grew revenues at an astonishing pace. Its stock price followed, ending the year up more than 500%. But even Zoom couldn't compete with the stock market's erstwhile darling, Tesla. The electric car pioneer's stock soared almost 700%, with last week's S&P 500 addition capping off Elon Musk's remarkable year.

Some sectors did particularly well amid the pandemic. The shift to remote work gave cloud providers a major boost, buoying the cloud stocks represented in the SKYY ETF. All those data centers found themselves in need of new hardware to deal with the extra demand, helping the semiconductor companies in the SOXX ETF. And once on the cloud, end-users had a whole new bucket of threats to think about: something the cybersecurity providers in the HACK ETF were eager to help tackle.

Going into 2021, the question is whether tech can maintain this outperformance. There's reason to think the good times won't last: As vaccines are rolled out and the world returns to something approaching normality, investors may rotate out of their "stay-at-home" trades in favor of the energy and travel companies that are expected to bounce back.

That could have significant consequences: Given tech's grip on the market, any collapse in tech stocks could affect the entire economy. It's Big Tech's world, in other words — we're just living in it.

The metaverse is coming, and Robinhood's IPO is here

Plus, what we learned from Big Tech's big quarter.

Image: Roblox

On this episode of the Source Code podcast: First, a few takeaways from another blockbuster quarter in the tech industry. Then, Janko Roettgers joins the show to discuss Big Tech's obsession with the metaverse and the platform war that seems inevitable. Finally, Ben Pimentel talks about Robinhood's IPO, and the company's crazy route to the public markets.

For more on the topics in this episode:

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David Pierce

David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

After a year and a half of living and working through a pandemic, it's no surprise that employees are sending out stress signals at record rates. According to a 2021 study by Indeed, 52% of employees today say they feel burnt out. Over half of employees report working longer hours, and a quarter say they're unable to unplug from work.

The continued swell of reported burnout is a concerning trend for employers everywhere. Not only does it harm mental health and well-being, but it can also impact absenteeism, employee retention and — between the drain on morale and high turnover — your company culture.

Crisis management is one thing, but how do you permanently lower the temperature so your teams can recover sustainably? Companies around the world are now taking larger steps to curb burnout, with industry leaders like LinkedIn, Hootsuite and Bumble shutting down their offices for a full week to allow all employees extra time off. The CEO of Okta, worried about burnout, asked all employees to email him their vacation plans in 2021.

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Stella Garber
Stella Garber is Trello's Head of Marketing. Stella has led Marketing at Trello for the last seven years from early stage startup all the way through its acquisition by Atlassian in 2017 and beyond. Stella was an early champion of remote work, having led remote teams for the last decade plus.

Facebook wants to be like Snapchat

Facebook is looking to make posts disappear, Google wants to make traffic reports more accurate, and more patents from Big Tech.

Facebook has ephemeral posts on its mind.

Image: Protocol

Welcome to another week of Big Tech patents. Google wants to make traffic reports more accurate, Amazon wants to make voice assistants more intelligent, Microsoft wants to make scheduling meetings more convenient, and a ton more.

As always, remember that the big tech companies file all kinds of crazy patents for things, and though most never amount to anything, some end up defining the future

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Karyne Levy

Karyne Levy ( @karynelevy) is the West Coast editor at Protocol. Before joining Protocol, Karyne was a senior producer at Scribd, helping to create the original content program. Prior to that she was an assigning editor at NerdWallet, a senior tech editor at Business Insider, and the assistant managing editor at CNET, where she also hosted Rumor Has It for CNET TV. She lives outside San Francisco with her wife, son and lots of pets.

Protocol | China

China’s edtech crackdown isn’t what you think. Here’s why.

It's part of an attempt to fix education inequality and address a looming demographic crisis.

In the past decade, China's private tutoring market has expanded rapidly as it's been digitized and bolstered by capital.

Photo: Getty Images

Beijing's strike against the private tutoring and ed tech industry has rattled the market and led observers to try to answer one big question: What is Beijing trying to achieve?

Sweeping policy guidelines issued by the Central Committee of the Chinese Communist Party on July 24 and the State Council now mandate that existing private tutoring companies register as nonprofit organizations. Extracurricular tutoring companies will be banned from going public. Online tutoring agencies will be subject to regulatory approval.

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Shen Lu

Shen Lu is a reporter with Protocol | China. She has spent six years covering China from inside and outside its borders. Previously, she was a fellow at Asia Society's ChinaFile and a Beijing-based producer for CNN. Her writing has appeared in Foreign Policy, The New York Times and POLITICO, among other publications. Shen Lu is a founding member of Chinese Storytellers, a community serving and elevating Chinese professionals in the global media industry.

It’s soul-destroying and it uses DRM, therefore Peloton is tech

"I mean, the pedals go around if you turn off all the tech, but Peloton isn't selling a pedaling product."

Is this tech? Or is it just a bike with a screen?

Image: Peloton and Protocol

One of the breakout hits from the pandemic, besides Taylor Swift's "Folklore," has been Peloton. With upwards of 5.4 million members as of March and nearly $1.3 billion in revenue that quarter, a lot of people are turning in their gym memberships for a bike or a treadmill and a slick-looking app.

But here at Protocol, it's that slick-looking app, plus all the tech that goes into it, that matters. And that's where things got really heated during our chat this week. Is Peloton tech? Or is it just a bike with a giant tablet on it? Can all bikes be tech with a little elbow grease?

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Karyne Levy

Karyne Levy ( @karynelevy) is the West Coast editor at Protocol. Before joining Protocol, Karyne was a senior producer at Scribd, helping to create the original content program. Prior to that she was an assigning editor at NerdWallet, a senior tech editor at Business Insider, and the assistant managing editor at CNET, where she also hosted Rumor Has It for CNET TV. She lives outside San Francisco with her wife, son and lots of pets.

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