A week of blockbuster earnings reports from Big Tech culminated Thursday with Amazon crushing forecasts of how much money it would rake in from pandemic-revved online shopping and growing reliance on Internet-hosted services.
The e-commerce colossus is among the Internet giants whose businesses thrived as precautions against Covid-19 led people around the world to go online for work, school, shopping and socialising.
Amazon reported that its profit in the recently ended quarter tripled as online sales boomed.
Revenue soared to US$108.5 billion, an increase of 44 percent from the same period a year earlier, as the pandemic fuelled a trend of shopping online instead of in real-world stores.
Profit in the quarter was US$8.1 billion, compared with US$2.5 billion in the first three months of last year.
The Amazon Web Services unit that hosts services and data in the internet cloud saw revenue in the quarter climb to US$13.5 billion.
People and businesses turning to the internet has boosted the cloud computing market where Amazon competes with Microsoft and Google.
On Wednesday, Apple and Facebook delivered soaring profits that essentially doubled over the previous year at US$23.6 billion and US$9.5 billion respectively.
Apple was lifted by strong gains in sales of iPhones and assorted products and services, while Facebook saw robust increases in digital advertising, reflecting people's rising internet usage during the ongoing pandemic.
The results followed what one analyst called a "monster" quarter for Google and its parent firm Alphabet, which along with Facebook dominates online advertising. They also come after a robust report from Microsoft, which is growing its cloud computing operations.
The latest round of results are likely to prompt more scrutiny over the growing dominance of Big Tech, particularly with their services seemingly ready-made for locked-down consumers.
"The large tech companies are in the right place at the right time," said Darrell West, a fellow at the Brookings Institution's Center for Technology Innovation.
"Covid has accelerated digital transformation in education, healthcare, remote work and e-commerce, and that has boosted the profitability of those firms. But there remains a backlash against the sector because people are worried about privacy, security and human safety."
The surging influence of Big Tech has led to calls for increased regulation, higher taxes and stronger antitrust enforcement to foster more competition and counter economic inequality.
Robert Atkinson, president of the Information Technology & Innovation Foundation, a think tank that often reflects views of the sector, said the tech giants are benefitting from the massive digital shift that has accelerated during Covid-19.
"The pandemic made major shifts in the economy and society away from analog toward digital," Atkinson said.
He maintained that corporate profits as a share of the economy have been largely unchanged but have shifted to new sectors.
"I've hardly been to the grocery store and I haven’t been on a plane in a long time," he said. "But I'm using more social media and streaming services. When you have a big shock to the system, it leads to some sectors doing poorly and others doing well."
Still, the massive firms are facing a growing "techlash" in Congress and elsewhere as their power and influence grows.
Apple this week said it would boost its US investment plan to US$430 billion over the next five years, aiming to create some 20,000 new jobs. Amazon said it would increase wages for some 500,000 US workers after it staved off a unionisation drive at one warehouse.
The Seattle-based e-commerce empire has gone on a hiring spree during the pandemic, adding 500,000 people last year. It now employs around 1.3 million people globally.
Typically, the company reevaluates salaries every fall, ahead of the holiday shopping bonanza. But it moved the annual review forward this year as it seeks to additionally hire "for tens of thousands of jobs across our operations in the US," Darcie Henry, a worldwide operations vice president said in a statement.
"The companies are making more money but putting at least some of that back into the US economy, which could mitigate the negative impact," Atkinson said.
Facebook reported its user ranks increased despite persistent criticism over its efforts to protect user privacy and stem misinformation.
The number of people using the leading social network monthly climbed 10 percent to 2.85 billion, according to the Silicon Valley giant. And monthly usage of the "family" of Facebook apps including Instagram, WhatsApp and Messenger was pegged at 3.45 billion.
On Tuesday, Alphabet said profit in the first quarter leapt to US$17.9 billion from $6.8 billion in the same period a year ago, while revenues jumped 34 percent to US$55.3 billion, led by gains in advertising and cloud computing services.
"Google had an absolute monster quarter with ads leading the way," said Patrick Moorhead at Moor Insights & Strategies.
Apple, meanwhile, said Wednesday that revenue was the best ever for its fiscal second quarter, up 54 percent to US$89.6 billion.
Revenue from iPhones jumped 65 percent from a year ago to US$47 billion, reflecting strong demand for new iPhone 12 models.
Apple also reported gains in sales of iPads, Mac computers, wearables and accessories, as well as its array of services from digital payments to music.
"Apple is in a period of sweeping innovation across our product lineup, and we're keeping focus on how we can help our teams and the communities where we work emerge from this pandemic into a better world," chief executive Tim Cook said.
by Glenn Chapman & Rob Lever, AFP