While the rest of the world reels from the pressures of the pandemic, Big Tech’s quarterly earnings continue to rise. Amazon, Apple, Alphabet, Microsoft and Facebook all reported double-digit revenue increases for the first quarter of 2021.
- April’s results showed that Big Tech is immune to the wider economic pressures impacting the rest of the world. Their combined annual revenues were up 25% and as The New York Times says, “for the tech giants, the pandemic hit was barely a blip.”
- The combined yearly revenues of Amazon, Apple, Alphabet, Microsoft and Facebook was reported at about $1.2 trillion. To put that in perspective, in less than a week, the five biggest tech companies make more than McDonald’s does in a year.
- Analysis from Axios says the pandemic has actually solidified the dominance of Big Tech in sectors like traditional media and retail. A strong recovery in the advertising market, ongoing reliance on cloud services and at-home entertainment have underpinned growth.
- Amazon leads the pack, ‘smashing earnings expectations’. The online retailer and cloud-services supplier posted first quarter revenues of $108 billion – a 44% increase in sales, with profits tripling to $8.1 billion.
- Apple shot past Wall Street estimates, with iPhone, Mac and iPad sales all way ahead of expectations. It reported record breaking revenues of $111 billion for the quarter, up 21%, with profits doubling to $23.6 billion.
- Google parent Alphabet boasted a 34% increase in revenue to $55 billion and a doubling of profits to a record $17.9 billion. Much of the growth was down to YouTube which grew its revenue by nearly 50% year-on-year.
- Facebook grew revenues by 48% year-on-year. Quarterly revenue was $26 billion, with net income growing 94% to $9.5 billion. The company attributed growth to a 30% increase in the average price per ad and a 12% increase in number of ads shown.
- Microsoft saw the biggest revenue growth it’s seen since 2018. Sales were up 19% to $42 billion, delivering profits of $15.5 billion, up 44%. Growth was partly due to increased PC sales, pushed higher by a coronavirus-related retail spike.
Big Tech’s pandemic success rests on increased need for the services they provide. “America’s technology superpowers aren’t making bonkers dollars in spite of the deadly coronavirus and its ripple effects through the global economy. They have grown even stronger because of the pandemic,” writes the NYT’s Shira Ovide.
Lockdowns have driven demand for online shopping, messaging apps and home-based entertainment. Small-business have relied on digital advertising to reach stay-at-home customers and businesses have bought devices and software to keep their work-from-home staff connected.
But it’s not all good news for Big Tech bosses. The optics of pandemic profit are not great at a time when politicians are already gearing up to introduce harsher technology regulation.
Shira Ovide says they face criticism for killing free speech and dodging taxes; complaints that they are stifling competition and treating workers poorly; and they face inumerable legal investigations and lawsuits.
“Big Tech is an invitation for everyone to hate you,” she says “But you do have towering piles of money.”