America's leading tech corporations have been hard hit by the recent surge in market volatility that has put a sharp end to the nine-year bull market in 2018. On Friday, all FAANG stock components closed down as the market wobbles on investor fears regarding a handful of negative headwinds such as a global trade war and heightened regulation on high-flying tech firms around the world. In light of the uncertainty, one analyst remains bullish on big tech's future, suggesting that despite current woes, firms such as Alphabet Inc. (GOOGL) are "too big to fail." (See also: Why Wall Street's Analysts Won't Give Up on Tech.)

James Cakmak, who follows stocks for boutique equity research and brokerage firm Monness Crespi Hardt, suggests that large-cap tech players have become so entrenched in society that they will inevitably rebound from their fall, as reported in a recent issue of Barron's. He argues that Alphabet, e-commerce and cloud giant Amazon.com Inc. (AMZN) and social media behemoth Facebook Inc. (FB), like financials in the '09 crisis, have become so powerful that even the most high-profile and far-reaching scandal couldn't break their "implicit contract" with America. 

The analyst suggests that regarding privacy, the tech giants have an unspoken understanding with consumers in which they exchange personal information, such as purchase history and searches, for deflation and logistical superiority. 

Collapse of Big Tech as Systematic Risk 

"The implicit agreement allows the company to get bigger and bigger, because in return consumers get better selection, lower prices and faster delivery, even if it comes at the expense of small business—and potentially tax revenue and constituent services down the road," wrote Cakmak. This system equips Facebook, Google and Apple with more personal data in order to enhance user personalization and customer experience. The analyst indicates that while consumers "have no clue what they are signing up for" and they willingly hand over a great deal of permission to big-cap tech. 

He then made a the leap to the notion that the collapse of big tech could present systematic risks, like those presented by major financial institutions a decade ago. "Whether it relates to keeping technological innovations concentrated stateside and outside of foreign powers, improving network connections and broader connectivity efforts, and serving as a resource for intelligence agencies. We’d argue any failures to the current big cap tech establishment can present new sources of systemic risk, hence we don’t see them going anywhere."

'Robust' Opportunities

While big tech's growth may decelerate, Cakmak continues to view the size and scope of opportunities as "abundantly robust" and safe considering a "prospering tech industry is just as vital as a prospering financial one." He recommends going long on AMZN, FB, and GOOGL and suggests that Amazon's "target adjacencies," in businesses such as food, media and health, each reflect a $500 billion or more market opportunity. 

“Coming back full circle, there’s no simple answer to the current issues, but we see new privacy laws enabling incumbents to emerge more entrenched when all is said and done,” wrote the analyst. (See also: GOOGL, FB Overdue for Govt. Oversight: Jim Mellon.)