Mag 7s’ trajectory shows legacy economy ‘being sunset’ for the digital age
A cursory look at the Magnificent 7 shares chart reveals a transparent trajectory: up solely. But when layered in opposition to all different shares, an much more fascinating sample emerges. 493 shares stay comparatively flat whereas the Mag 7s take a steep upward grind, like climbing the Eiger. As Bitcoin advocate and founding father of The Network State, Balaji Srinivasan, muses:
“My clarification is that the legacy economy is being sundown in favor of the Internet economy.”
Stripe CEO Patrick Collison ruminated on related data, highlighting a development rising throughout Google, Apple, and Microsoft. He questioned why the firms exhibited the identical progress dynamics when they’re “ostensibly in completely completely different companies,’ to which Balaji replied:
“I believe these graphs mirror the secular shift in direction of the Internet. Almost each motion that was as soon as executed offline is shifting on-line, and routed via tech firms.”
Mapping the digital migration
What’s occurring right here? Patterns that may as soon as have been dismissed as coincidences now appear to sign one thing deeper.
The “secular shift” is economist-speak for a everlasting, structural change. In this case, it’s the decades-long migration from offline to on-line throughout the global economy.
From grocery orders to monetary transactions, human interactions, and even distant work, the COVID-accelerated rush to digital has turn into the foremost route for commerce and connection.
The Balaji thesis: the web swallows the world
Balaji’s response to Collison’s query made express what many now intuitively sense: tech firms aren’t simply rising, they’re turning into the main infrastructure for life itself.
“Legacy” sectors like actual property, banking, and manufacturing are being reoriented, rewired, or outright changed by software program. In Balaji’s phrases, virtually each offline exercise is “routed via tech firms,” as digital-first options supply scale, effectivity, and international attain beforehand unimaginable.
This will not be an innovation cycle however a replatforming. It’s why firms that after had nothing in widespread now present the identical progress curves or contraction dangers: the offline world is contracting, whereas the web economy swells to fill the hole.
For traders and founders, these developments reinforce a easy crucial: wager on digital, or threat obsolescence. The parallel progress patterns throughout disconnected verticals counsel that web penetration is now the single largest driver of financial destiny.
Tech firms, with their community results and digital rails, turn into the middlemen for every little thing. They reinforce the winner-take-most dynamic so obvious in in the present day’s markets.
For policymakers, there’s a warning: the digital divide will solely widen except deliberate intervention closes it. As extra actions from life are intermediated by platforms, the value of being unconnected grows.
The trajectory of Magnificent 7 shares, and, particularly, Google, Microsoft, and Apple, shines a light-weight on a future the place the majority of human motion runs via software program. It’s a world reshaped not by a single breakthrough, however by the common, irreversible shift from meatspace to our on-line world.
The proof is in the charts, and the development is simply getting steeper.
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