Technology is Still the Most Profitable Sector Globally

Technology is Still the Most Profitable Sector Globally

Technology has been the most lucrative sector for over a decade now. And the number one technology company in terms of profit for some years has been Apple. For 2023, Apple’s profits now stand at almost $100 billion. Interestingly, the top three companies with the highest profits in America for 2023 are all technology companies.

Microsoft comes second after Apple with almost $73 billion and Alphabet, the Google parent company comes in third with almost $60 billion in profits. Another tech giant, Meta Platforms which is the parent company of Facebook added to the tech companies in the top 10 highest profit earners of 2023 with about $23 billion.

Whereas the top earners cannot be explicitly used to point at the performance of sectors as a whole and in a global sense, at least they can give pointers to some of the best-performing sectors. Of the top 10 most profitable companies in the USA, 4 are technology companies, 2 are financial institutions, 2 are from oil and gas, 1 from health and the last one is from postal services.

Independent consideration ratifies my conclusion that technology is among the US’s most profitable sectors, accounting for 28.12% of total US profits equivalent to about $306 billion. Energy comes in second with about $179 billion which is equivalent to 16.67% of total US profits and Healthcare comes in third with $154.8 billion equivalent to 14.23%.

Financials come in fourth and transportation wraps up the top five. In as much as these are pointers of the American market, a keener comparison with some other sectors still shows that the best-performing companies and sectors in the US are also among the best-performing globally.

A look at the UK for instance points to banking as the best-performing sector with the highest profits at about $47 billion. Construction comes in second and legal services third with about $24 billion and $14 billion respectively in profits. Management consultancy and computer services come in fourth and fifth positions to close the top 5 most profitable sectors.

Computer services is technology in all sense and sometimes technology cuts across into banking especially fintech and thus technology still rules big in the UK as well. The same could be said of other economies as well.

A look at China as the last case shows mining as doing well the most in terms of revenue generation followed by building construction and e-commerce wrapping the top 3 best performers of 2023. It is worth noting that e-commerce is a technology segment. Software development makes it among the top ten at position eight. And even though revenues may not be a measure of profitability unless we know the costs, it is still a performance measure.

Switching lanes to the Fortune 500 companies, Walmart from the US tops the list with profits of about $11 billion. Saudi Aramco comes in second with profits of about $159 billion as a player in the oil and gas sector and State Grid from China takes the third position with profits of about $ 8 billion. In this case, profitability is not the only performance criterion, other factors such as market capitalization, assets and gross revenues among others are used to do the ranking.

Note also that the companies are ranked individually and not as a sector. So, when it comes to sector ranking globally, technology and technology innovation are at the top not only in profit returns but also in stock performance and fund returns.

Why is technology the best performer?

Technology plays a pivotal role in other sectors and courtesy of innovation, the sector is poised to continue performing well.

To answer this question, I will ask why Apple, Microsoft, Alphabet, Meta, Tesla and other technology companies did, and are doing well. And the answer can help shape the reasons why the sector performs well as a whole. The tech companies I mentioned have done well courtesy of innovative products both in terms of hardware, software and services. Apple’s iPhones, iPads and Macs are but a few of the examples of innovative products keeping the company at the top for instance.

As a sector, technology has performed well and that reflects the role the sector plays in innovation and how that influences the market on a large scale. Given that Industry 4.0 is powered by technology and technology plays a critical role in other sectors as well, that explains how innovation may keep technology performing well for some time in the coming days.

That should not be taken to mean the gospel truth regarding individual company performances. Nay. There are market dynamics that keep shaping markets and given the levels of uncertainty, other players can come up and topple the market. Anything is possible.

However, there is a strong indication that Technology as a sector will continue to do well in terms of profitability. Other sectors that may continue doing well albeit not in equivalence scale to technology, at least in the short run, include energy, healthcare and financial services. These are the sectors to watch in 2024.

Geoffrey Ndege

Geoffrey Ndege

Geoffrey Ndege is the Editor and topical contributor for the Daily Focus. He writes in the areas of Science, Manufacturing, Technology, Innovation, Governance, Management and International Emerging Issues. For featuring, promotions or support, reach out to us at
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