Big Tech Raked It in Again. Why No Celebration?
Giants from Apple to Facebook face challenges in meeting investors’ elevated expectations amid an uncertain economic outlook.
Even Big Tech may be vulnerable to a pandemic winter.
Photographer: Krisztian Bocsi/BloombergFor a second straight quarter, Big Tech displayed its unparalleled ability to generate impressive profits during a global pandemic. Investors shouldn’t get too complacent, though. The industry’s sizable share-price gains this year, along with embedded high expectations, make betting on a “three-peat” a riskier proposition. Even the tech giants may be vulnerable in a Covid-19 winter.
Late Thursday, Apple Inc., Amazon.com Inc., Facebook Inc., Google parent Alphabet Inc. and Twitter Inc. all reported better-than-expected financial results. As with many companies, they benefited from a rebound in economic activity following government stimulus programs and a general lifting of shelter-in-place restrictions around the world. But unlike many other businesses, the tech giants were able to make money even during worst the parts of the earlier lockdowns thanks to their dominant business models and market positions.