Genius of the tech market Gene Munster – from his research-driven, venture capital firm Loup Ventures – approaches two of tech’s biggest titans with bullish perspective in the wake of Facebook Inc’s (NASDAQ:FB) Cambridge Analytica snafu. In the aftermath of FB’s bruised user trust and concerns over online safety data privacy, Apple Inc. (NASDAQ:AAPL) and Amazon.com, Inc. (NASDAQ:AMZN) are looking really good to this research analyst.
“Apple and Amazon are relative safe havens,” cheers Munster, who sees a favorable upper hand for both tech heavyweights.
The fallback from Facebook’s privacy mess could mean tightened government regulation reigns on the regulation of how online consumer data is used. However, Munster believes the rocky impact here is for tech players that “rely heavily on monetizing data,” listing Google, Twitter, and Snap along with Facebook at risk. Notably, Apple and Amazon are in another category.
In one corner, you have Apple, where CEO “Tim Cook has made privacy a religion,” underscores the analyst. “We expect over the next year investors will look favorably on Apple given the company’s privacy-first ethos in an age where privacy is becoming a more prevalent topic.”
Moreover, Munster pays attention to Apple’s website with a section detailing just how valued user privacy is, calling it “a fundamental human right;” one that the analyst notes “impacts everything from secrecy around new products to Apple Pay’s anonymous transaction framework.”
In another corner, a “service-first” company like Amazon stands to reap the advantages form Facebook’s privacy scandal: Munster explains, “Amazon will also likely benefit from the Facebook blowback given Amazon relies less on data to run its business than ad-focused companies.”
For Amazon, the priority boils down to “delighting the customer through the services they provide,” which means “advertising has never been a focus of the company,” by Munster’s eyes. Ultimately, “it’s inconceivable they would abandon their current core businesses to pivot to an ad-first model that leaves them exposed to the risks we’ve highlighted in this note. Amazon’s real use case for user data is on their own site, targeting users with product suggestions,” surmises the analyst.
With tech enthusiast concerns of user privacy running amiss this week, it is encouraging for Apple and Amazon investors that a savvy research analyst like Munster spots these as a true “privacy safe haven.”