2020: Tech Industry’s Formidable Year of Boom

2020: Tech Industry’s Formidable Year of Boom

As 2020, which remarkably was filled with economic and health turmoil, winded down to an end, 2021 begins a fresh journey under which businesses may continue in strains or blossom. COVID-19 pandemic brought the world economy on its knees and left many gasping for a fresh year in the hope of a better economic future.

Close to 2 million people have died and more than 84 million others infected globally as the unprecedented toll of the pandemic impacts crippling effect on human behavior as well as means of livelihood.

As both humans and businesses struggle to cope with the exigencies, solution lies in actions not date and time. After all, while many cried, others were smiling in the heat of the 2020’s crises. In Asia, Europe and America, markets showed such resilience that added and elevated many business figures to the billionaire’s club.

Bloomberg analyzed 2020’s performance and published some figures that could only be imagined early this year. Although the energy, hospitality and travel industries were suffocated with the bitter taste of the pandemic, the tech industry salivated through a tasty recipe it made from the downside of it.

In the United States, the market went from bear to bull in a surprising flip as technology companies defied the pandemic through innovative concepts. While many like Zoom, Amazon, Facebook, Google, Apple, and Microsoft among others used virtual life to push through the storm, Tesla, an electric vehicle maker, stuck to tradition and shone the brightest. To the glory of its CEO Elon Musk, who added $140 billion to his fortune and became the second richest person in the world.

Tesla stock was flying so high flying that it was inducted into S&P 500 in the last month of 2020. The S & P 500 went from peak to trough to peak again within 175 days as investors killed the fear of lockdown and prolonged recession to go back to the stock business. After pandemic-induced low-yields, the benchmark has rallied 68%, smashing old records and adding about $14 trillion in value. At the end of 2020, the gauge was 16% high.

“Believers in billionaire Elon Musk helped spark a 743% stock-surge in Tesla Inc., propelling the company’s market value to a dizzying $669 billion. Investor enthusiasm about the electric-vehicle maker’s addition into S&P 500 and the prospect of higher growth for the sector as more consumers and policy makers embrace clean energy also helped fuel 2020’s meteoric rise,” Bloomberg said.

Tech product

Tesla defined itself in 2020 in three outstanding ways; it was the top performer on the S&P 500, with its gain more than double those of the second-best stock, Etsy Inc.; its shares now account for about 1.7% of the index’s weight, lagging Apple, Microsoft, Amazon and Facebook; its shares also worth more than five times General Motors, Ford Motors and Fiat Chrysler Automobile combined.

For other tech stocks, virtual life became a force that drove the indexes to record highs. Apple, Amazon and Netflix led the space of companies who beat the expectations.

“A boom in e-commerce spending sent Amazon surging 76%, while Apple became the first-ever $2 trillion company amid strong demand for its iphone 12 models and optimism about its self-driving car efforts. Stuck-at-home consumers spent more time streaming television shows and movies, sparking a rally in Netflix shares,” Bloomberg noted.

The e-commerce boom also resulted in spurred growth in digital payment. Paypal and other digital payment platforms had a share record that Bulls expect to continue as consumers who enjoy the comfort of making purchases from home amplify.

“The surge in online shopping and the rush to deploy vaccines across the country helped to fuel delivery services companies like FedEx, and United Parcel Service Inc. FedEx, which has jumped 72%, reported quarterly sales that topped expectations four straight times which helped push its market value above $79 billion earlier in December. Meanwhile UPS managed to cut delivery times by a day on 10% of its ground packages. The stock climbed 44% last year,” the report said.

The status quo is expected to be maintained in 2021 as vaccines continue to be rolled out and the US government working on another stimulus package. While signs of recovery are yet to be seen, the tech industry has proved innovative enough in dealing with 2020 that the spikes of COVID-19 second wave will not alter the trajectory.

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