By Nataly Kehyayan, Staff Writer
The highly anticipated big-tech earnings report released on Thursday, October 29 was a pleasant surprise for investors. A total of $220.28 billion in revenue was realized by Big Tech companies including, Apple, Amazon, Facebook, and Google in the last quarter. The release took place a day after the CEOs of Facebook, Google, and Twitter testified before congress.
Perhaps Google deserves the most credit for a very successful quarter amid the biggest tech antitrust lawsuit in two decades. The day before the earnings were reported, Google was questioned for numerous hours about their monopoly power in the industry. Their best argument against these accusations is that “People use Google because they choose to, not because they are forced to, or because they cannot find alternatives”.
The parent company of Google, Alphabet, reported a 14% increase in revenue of $46.17 billion and net income was reported at $11.2 billion, topping analyst estimates. CEO Sundar Pichai stated that they owe their success to their investments in AI and other technologies.
This is good news for investors, especially after the company’s first reported decline in revenue last quarter. Google still has unquestionable dominance in the search engine competition with 92.26% of people preferring their browser compared to their second competitor, Bing, at 2.83%.
Social distancing and more people using social media to stay connected have been an asset for Facebook. The most significant increase in the number of Facebook users was derived from India.
However, this was not the case in the US and Canada, as a decrease of 2 million daily users occurred which is estimated to continue in the next quarter. This is a bit of a shock as it goes against the overall trend of an increase of 35 million users since the last quarter. However, it can be explained as a simple correction after inflated numbers at the start of the pandemic.
Facebook reported $21.5 billion in revenue in the third quarter (up 22%) and a net income of $7.8 billion (up 29%). According to the company, investors can expect to see even more growth in the coming quarter. These numbers are very impressive considering the multiple obstacles that Facebook is currently facing, including the pressure of the election and the ad boycott that took place in July over hate speech.
Amazon keeps offering investors a prime experience. Sales were up by 37%, or by an astonishing $26 billion thanks to the continuing effects of the coronavirus pandemic. These numbers are most likely not a one-time phenomenon with the holidays approaching and more customers preferring online shopping from the safety of their homes, rather than the traditional way of going to the mall. This quarter could potentially be much bigger for Amazon as Jeff Bezos estimates around $112 billion in sales.
However, after-hour numbers did not look as promising, going down by more than 1%, once the realization of the company’s tremendous Covid-19 spendings kicked in.
The takeaway from these numbers is simple: these companies have become such a crucial part of our lives that almost nothing can stop them from growing. Their products and services have become even more important during the pandemic and will likely have lasting effects on the economy.
Photo by Carlos Muza, Unsplash