Even with the reopening of economies that many anticipated would cause tech to pull back, big tech came out with huge earnings in the quarterly reports this week, proving they still have a place at the table and room to grow.
Tuesday saw Microsoft, Apple, and Alphabet all posting monstrous earnings, bringing in a combined $56.8 billion in after-tax profits, almost doubled the same time last year. According to the Financial Times, collectively, it was 30% higher than what analysts on Wall Street had predicted, averaging out to roughly $5 billion a week of after-tax profits.
“Five percent of world GDP is tech spending, it’s projected to double — the doubling is going to happen at an accelerated rate,” said Satya Nadella, CEO of Microsoft.
While there had been initial concerns that big tech, which had pivoted successfully during the pandemic, might have issues navigating economies reopening, the numbers prove otherwise.
“I think the takeaway is, all the digital habits that we picked up over the past 12 months, they’re going to stick with us when we come out of this,” said Jim Tierney, portfolio manager at AllianceBernstein. He added, “Digital advertising is just on fire.”
Google’s advertising sales were up 69% from the year previous, while the growth of Microsoft’s newest business, the Azure cloud platform, was more than 50%.
Shortages in valuable tech necessities such as semiconductors didn’t slow tech giant Apple; the sale of the iPhone was up over 50% last quarter. iPhone sales compromise half of Apple’s revenue.
Total revenue for last quarter for the three tech giants was $189.4 billion, $15 billion more than Wall Street had anticipated and 39% greater than the same period last year.
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