Alphabet (Google parent company), Amazon, Apple, and Facebook posted a combined $206 billion in revenues, adding a cumulative $29 billion to their bottom lines in last quarter. That is massively astonishing when you consider that the world is largely broken. The BIG Four are huge forces across markets, and are clearly dominant. The result: close to 40% of the S&P. I do think Amazon will hit $2 trillion in market cap by June 2021. China powered Apple results, with regional revenues topping $9.3 billion with record iPad sales, Fortune reported.
Looking at this plot, you will notice something: only tech – big or small – is doing great. Others like financial services, healthcare, etc have huge activities but they are not capturing the financial values. Yes, we are in the midst of a pandemic, with healthcare companies at the forefront. But the fact is evident: they are not capturing value and are merely creating opportunities for technology companies which power the world.
Thursday was dominated by the numbers, the left-brain analysis that showed how at least three of the big four are faring in the world’s darkest times. In a word: well. Amazon, Apple, and Facebook surged in the second quarter, each for their own reasons.
Amazon’s cloud business soared, and it bore fruit from its investments in delivery, satisfying sheltered-in-place customers. Apple sold a little bit of everything, including, not that surprisingly, Mac computers. The word computer used to be in Apple’s name and for the last decade it has been a slow-growth annuity for the iPhone maker. Homebound workers need computers. Facebook proved that users and advertisers aren’t that interested in how much the company harms democracy and decency. For now.
Only Google’s numbers gave reason for pause, as advertising revenue declined. Google’s ad business is so big that it’s probably the best proxy for the economy of its cohort. That it didn’t grow in a quarter when parts of the global economy were improving bodes ill
In the video below, I explain.