Forget the FANGS, ATLAS is the new tech acronym in town.

It’s the acronym that looks like being the next big thing — it stands for, well read on, some of the world’s best performing stocks make up the number.

Article updated: 12 February 2020 2:00pm Author: Michael Baxter


I’ll put you out of your mystery and tell you what ATLAS stands for — Apple, Tesla, Lam Research, Advanced Micro Devices and Salesforce.

If you had invested £1,000 spread evenly across these companies in 2010, then right now your investment would be worth around £12,000, that’s excluding dividends.

You won’t be surprised to learn that many observers have started associating these companies with the word bubble.

I am not so sure.

You may know, Atlas was a figure from Greek mythology — one of the Titans, whose task it was to hold the world upon his shoulders. Atlas was probably one of the most stupid gods in mythology — he thought he had tricked Heracles (the strong man of Greek mythology) into taking over the task. But Heracles, asked Atlas to show him how best to hold the sky, and the giant god eagerly took the sky from Heracles shoulders, only for the famous Greek hero to say something along the lines of “thanks sucker, I am off now.”

I wonder whether it is equally stupid to lump these five companies together.

I think everyone reading this will know what Apple and Tesla do. Lam Research and Advanced Micro Devices (AMD) are in the chip business and Salesforce is a leading cloud technology company.

I suppose you could say that AMD and Lam Research operate in the same area — although their speciality is quite different. AMD has traditionally been Intel’s main rival, whereas Lam Research provides equipment and services to companies like AMD and Intel.

What Apple, Tesla and Salesforce have in common is that they use cutting edge technology, but actually operate in quite different areas — consumer hardware and related services, cars and batteries and cloud services.

Furthermore, if you were to strip Tesla out of the ATLAS group (admittedly ALAS doesn’t roll off the tongue) then your £1,000 would be worth around £9,000 — good, but not quite as stunning as with Tesla.

Besides, the price-to-earning (P/E) ratios are all over the place. Apple and Lam Research have P/Es of around 25. AMD and Salesforce have P/Es approaching 200.

All companies, with the exception of Tesla, are profitable over 12-months. All, including Tesla, have seen rapidly growing revenue in recent years — and in the case of Tesla, it was profitable in the last half-year.

If you want to argue that Tesla is a bubble stock, I would disagree but would understand your rationale.

It is much harder to make that argument for the other four — sure the P/Es are quite elevated for AMD and Salesforce but there are good reasons for this. In the case of AMD, global demand for chips is exploding as computers appear in more and more places. Computers used to be just that, computers. Now they are also phones, in cars and form the internet of things. Meanwhile, the cloud is transforming business.

This is not another dotcom bubble — in that case companies were getting massive valuations even though they only had the vaguest idea of how they would ever make money.

Will these ATLAS companies continue to enjoy a booming share price? Well, I have written about Apple and Tesla enough times for you to know what I think.

Lam Research is quite hard to quantify, there is a dearth of helpful coverage out there on the company’s products. The valuations of AMD and Salesforce look a little stretched — but all three of these companies operate in industries with enormous growth potential. I am not saying their share prices won’t ever fall below their current prices, but I suspect shares are not close to all time highs, either. 

These views are those of the author alone and do not necessarily reflect the view of The Share Centre, its officers and employees

Michael Baxter portrait photo
Michael Baxter

Economics Commentator

Michael is an economics, investment and technology writer, known for his entertaining style. He has previously been a full-time investor, founder of a technology company which was floated on the NASDAQ, and a director of a PR company specialising in IT.

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