Tech Giants Report Business Is Good

Amazon.com Inc. delivered soaring quarterly sales and profit, leading a pack of tech giants on Thursday that reported thriving business during the throes of the coronavirus pandemic and highlighting the industry’s central place in business and society at a time of growing concern over its clout, reports The Wall Street Journal.

Wall Street Journal graphics

The success of Amazon, Apple Inc. and Facebook Inc. in the face of a pandemic that has caused unprecedented economic disruption and millions of job losses shows how tech giants have become even more indispensable at a time when people are living and working more online. The companies showed strength in businesses ranging from gadgets and online retail to cloud computing and digital advertising.

Amazon reported record revenue and profit even as it spent $4 billion between April and June to stabilize its supply chain and improve worker safety. The Seattle e-commerce pioneer now employs more than 1 million workers, the second-largest in the U.S. Amazon reported $88.9 billion in sales as a flood of customers grew to rely more than ever on online shopping. Profits doubled to a record $5.2 billion, far exceeding analyst expectations.

Apple proved to be another example of the technology industry’s strength in the pandemic, reporting a better-than-expected 11% increase in quarterly sales due to strong demand for apps, work-from-home devices and a new, low-price iPhone.

Facebook showed the resilience of its social-media business despite a continuing procession of controversies. Sales rose 11% to $18.7 billion due to increased engagement from users—though growth slowed and the company warned about persistent risks from the economy and an advertiser boycott.

Google parent Alphabet Inc. was the outlier Thursday, reporting a decline in quarterly revenue compared with a year earlier for the first time in company history. Still, the company’s sales beat analyst expectations, and its profit, though down 30%, was still more than $6 billion.

Shares in all four companies, already among the best performers for large corporations across the stock market this year, rose after hours, with Amazon, Apple and Facebook all gaining more than 5%. Alphabet edged up almost 1%. Collectively, those stock moves would add more than $200 billion to their market value if they hold up in trading Friday. Apple alone gained about $100 billion, roughly equal to the market value of Citigroup Inc. and exceeding that of Starbucks Corp.