Amazon caps blockbuster Big Tech earnings reports
The e-commerce behemoth is one of the internet behemoths whose businesses thrived as Covid-19 precautions drove people all over the world to go online for work, education, shopping, and socializing.
Amazon announced that its profit in the most recent quarter tripled due to a surge in online sales.
Revenue soared to $108.5 billion, up 44 percent from the same time last year, as the pandemic fueled a trend of shopping online rather than in physical stores.
Profit for the quarter was $8.1 billion, up from $2.5 billion in the same period last year.
Revenue at Amazon Web Services, which hosts services and data in the internet cloud, increased to $13.5 billion in the third quarter.
The increased use of the internet by individuals and companies has fuelled the cloud computing industry, in which Amazon competes with Microsoft and Google.
Apple and Facebook also recorded record quarterly earnings this week, with $23.6 billion and $9.5 billion, respectively, more than doubling from the previous year.
Apple was boosted by strong growth in iPhone and other product and service revenues, while Facebook saw significant rises in digital ads, showing people's increased internet use during the ongoing pandemic.
The results came after what one analyst described as a "monster" quarter for Google and its parent company Alphabet, which, along with Facebook, dominates online advertising.
They also follow a strong study from Microsoft, a cloud computing and video game powerhouse.
The most recent round of results is likely to raise more questions about Big Tech's rising dominance, particularly because their services seem to be tailor-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, health care, remote work, and e-commerce, and that has boosted the profitability of those firms."
The growing presence of Big Tech has prompted calls for more regulation, higher taxes, and tougher antitrust enforcement in order to stimulate more competition and reduce economic inequality.
'Shock' by Covid
According to Robert Atkinson, president of the Information Technology & Innovation Foundation, a think tank that often represents industry opinions, the tech titans are benefiting from the huge digital change that has accelerated during Covid-19.
He insisted that companies have long made those profits; it's just that they're now internet titans.
"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."
Nonetheless, as their power and influence expand, the large corporations face an increasing "techlash" in Congress and elsewhere.
Apple announced this week that it would increase its US investment plan to $430 billion over the next five years, with the goal of creating 20,000 new jobs.
Following the defeat of a unionization effort at one of its warehouses, Amazon announced that it would raise salaries for approximately 500,000 US employees.
"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.
Despite continued criticism about its attempts to protect user privacy and combat disinformation, Facebook announced a rise in user numbers.
According to the Silicon Valley behemoth, the number of people using the leading social network on a monthly basis increased by 10% to 2.85 billion.
Monthly use of the "family" of Facebook applications, which includes Instagram, WhatsApp, and Messenger, was estimated to be 3.45 billion.
Alphabet recorded a $17.9 billion profit in the first quarter, up from $6.8 billion in the same period a year earlier, thanks to increases in ads and cloud computing services.
"Google had an absolute monster quarter," said Patrick Moorhead at Moor Insights & Strategies.
Meanwhile, Apple announced Wednesday that revenue for its fiscal second quarter was the highest ever, rising 54 percent to $89.6 billion.
Apple announced increases in iPhone, iPad, Mac device, wearables, and accessory revenue, as well as its suite of services ranging from digital payments to music.