The combined annual revenue of Amazon, Apple, Alphabet, Microsoft and Facebook is around $ 1.2 trillion, according to revenues released this week, 25% more than before the crisis. America’s tech superpowers have grown even stronger with the pandemic, as highlighted in a lengthy analytical article on New-York Times. How is this explained?
The rush for their services
First, there is the obvious: we simply needed their services more. People have turned to their apps in droves to communicate, work and play online. Businesses needed to continue reaching out to people stranded in their homes and so paid Big Techs to promote them. The health crisis did not encourage people to physically go to stores and the population preferred to do their shopping on Amazon. Parents and students are equipped with computers and in particular with Apple products. Companies have made greater use of Microsoft software because of telecommuting. The crisis has forced companies to go digital quickly.
An acceleration of their growth
Nothing to do with the recession from 2007 to 2009, which had hurt Big Tech. Amazon’s first-quarter sales were up 44% from a year earlier, and its pre-tax profits more than doubled to $ 8.9 billion. The company’s stock market value reaches $ 1.8 trillion. The growth of Google and Facebook accelerated during the first quarter. At the same time, Apple’s revenue from the sale of iPhones grew at a rate not seen since 2012.
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At the same time, these companies are taking advantage of the pandemic to cut their budget on promotional and travel expenses … Facebook’s profit margins are higher now than before the pandemic. Stock indexes in the United States are hitting new highs. And investors are betting on Big Tech stocks, which seem even more essential than before.
The gap is therefore widening between Big Tech and the rest of the companies, some of which are suffering or will disappear. But also with the population. Ordinary citizens have found themselves downgraded by this crisis, will find it difficult to get a job again and may lose their homes. This triumph will not benefit everyone and is now becoming almost indecent.
Source: The New-York Times