Today: Annual accounting of Silicon Valley's largest technology companies shows the changes in the region's iconic sector. Also: Google buys drone company as tech stocks bounce back.
The Lead: Investor return, gains from Google and Tesla highlight 2014 SV150
The annual SV150 list of the largest technology companies in Silicon Valley tallies the sales of Bay Area tech firms, but also reveals other financial changes in the region's iconic sector, and the 2014 list uncovered many changes in the way these high-profile companies use their massive revenue streams.
The most drastic change appeared in investor return and cash on hand: Silicon Valley tech firms had nearly a third of the entire cash reserves held by U.S. companies, and their record profits -- $103.7 billion -- were almost entirely pushed back to investors through dividend payments and stock repurchases, which totaled $97.4 billion, more than twice the previous annual record. Dividends and stock repurchases were part of an expansion in the SV150 online database for 2014, which also includes profile pages for each of the 150 companies on the list.
Apple was the largest tech company in Silicon Valley for the third consecutive year, and the largest driver behind the cash-on-hand and investor-return trends, building bank accounts stuffed with $158.8 billion and returning $35.9 billion to investors as part of a plan to eventually give stockholders $100 billion. Lower on the list, Google jumped over Intel into third place one year after passing Cisco, part of a trend that saw younger companies jumping in front of the valley's standard-bearers that columnist Michelle Quinn discussed.
The biggest mover on the 2014 list was Tesla Motors: The Palo Alto electric car maker jumped 42 spots to No. 39 on the list, as its sales shot higher by nearly 400 percent as its stock price followed along. CEO Elon Musk has his eyes on a much bigger prize, however, even while also riding big growth from his other Silicon Valley cleantech company, San Mateo solar installer SolarCity.
In the different sectors that make up the SV150, movement was varied. Apple's dominance continued to help the small Consumer IT sector, while Hewlett-Packard's revenue struggles brought down the much larger Enterprise IT group as a whole. Sales surges from Facebook and Google helped make the Web sector an engine of growth for the SV150, though Tesla's performance gave the tiny cleantech sector the largest growth rate. The Semiconductor sector gave Silicon Valley its name and continues to be largest chunk of the SV150, with 41 companies on the list led by Intel, and the networking sector and top dog Cisco are looking to the Internet of Things for a revenue boost. The Biotechnology/Health Care sector experienced strong growth and venture-capital interest and could be headed for more, as Gilead's new hepatitis C drug and a bevy of freshly public companies land. Aside from tech, Bay Area companies lagged as Safeway and other retailers suffered from a sluggish economic recovery and Chevron waited for returns from new expeditions.
In an online chat on the SV150, columnist Quinn and data miner Jack Davis said that the trends apparent on the 2014 list give them an interesting list of things to watch in 2014, including the market for initial public offerings, the effects of the Apple-Samsung trial, and new offerings from tech companies looking to diversify their revenue streams.
SV150 market report: Tech stocks gain as Google goes shopping for drones
After the sell-off of the past month that has hurt the companies jumping to the forefront in the SV150, technology stocks bounced back Monday along with Google, which purchased a drone company in yet another acquisition.
Google confirmed Monday that it had acquired Titan Aerospace, the solar-powered drone company that was a reported acquisition target for Facebook; the Mountain View search giant took home the prize after Facebook instead acquired the employees of a similar company, Ascenta, in March. Both companies say that their interest in drones lies in their ability to help beam Internet access to the ground, opening up new areas of the world to the Web, an initiative that has also spurred Google to test the use of balloons. Project Loon is one of many offbeat initiatives at Google, including its mysterious barge, acquisitions of robotics company Boston Dynamics and smart-home gadget maker Nest Labs, and its Google Glass wearable computers, which will go on sale to the general public for the first time Tuesday morning. Google had been one of the hard-hit companies in the recent sell-off, accounting for the largest percentage of the Nasdaq's decline, but shares gained 1.4 percent to $545.20 Friday. Facebook, which has also suffered on Wall Street of late, improved by 0.6 percent to $58.89 as Topeka Capital Markets analyst Victor Anthony suggested the Menlo Park company may be preparing for a push into China.
Apple gained 0.4 percent to $521.68 as the third week of its current court battle with Samsung got underway with the Korean company presenting its defense. Yahoo increased 1.8 percent to $33.44 ahead of Tuesday's earnings report, which will provide some information on Alibaba's performance. Yahoo will be joined on the earnings stage Tuesday by Intel, as Silicon Valley companies release financial information made even more important by the recent Wall Street weakness. eBay recovered by 1 percent to $53.98 as it traverses a rough road, and Twitter rebounded with a 2.1 percent gain to $40.87 as the San Francisco company said its top executives would not unload stock as lock-ups expire. Netflix gained 1.5 percent to $331.58 as the Los Gatos video-on-demand company announced that customers' streaming speeds have improved since a deal was reached with Internet service provider Comcast.
Up: Splunk, Symantec, Palo Alto Networks, Electronic Arts, Twitter, Yahoo, Cisco, Salesforce, Juniper, AMD, Workday, VMware, Oracle, Netflix, Adobe, Intel, Hewlett-Packard, Google, Sandisk, Intuit, Gilead, Nvidia, eBay
Down: Tesla, Zynga, Applied Materials, Ruckus, SunPower, Pandora
The SV150 index of Silicon Valley's largest tech companies: Up 12.9, or 0.96 percent, to 1,357.33
The tech-heavy Nasdaq composite index: Up 146.49, or 0.91 percent, to 16,173.24
The blue chip Dow Jones industrial average: Up 22.96, or 0.57 percent, to 4,022.69
And the widely watched Standard & Poor's 500 index: Up 14.92, or 0.82 percent, to 1,830.61
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/jowens510.