Microsoft, Alphabet and Apple Post $57 Billion In Earnings, ‘PGRO’ Profits

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.

Investing in Growth with ‘PGRO’

The Putnam Focused Large Cap Growth ETF (PGRO) is an actively managed, non-diversified fund that focuses on large, growth-oriented U.S. companies.

The fund selects companies similar in size to those in the Russell 1000 Growth Index, whose market caps are between $2 billion and $2.1 trillion. Putnam Investment considers a company’s valuation, financial strength, growth potential, competitive position in its industry, projected future earnings, cash flows, and dividends when buying and selling investments.

As a semi-transparent fund using the Fidelity model, PGRO does not disclose its current holdings daily. Instead, it publishes a tracking basket of previously disclosed holdings, liquid ETFs that mirror the portfolio’s investment strategy, and cash and cash equivalents. The tracking portfolio is designed to track the actual fund portfolio’s overall performance closely, and actual portfolio reports are released monthly.

As of the end of June, PGRO had holdings in Microsoft (MSFT) at 9.49%, Apple (AAPL) at 8.19%, and Alphabet (GOOGL) at 6.45%.

PGRO has an expense ratio of 0.55% and had 37 holdings as of the end of June.

For more information, visit the Big Ideas Channel.