The £170bn tech boom: Bumper figures send shares in Amazon, Apple and Facebook soaring…but Google dives
- Huge rally saw Apple shares soar to record highs of more than $412 each
- Bonanza on Wall Street added £5.3billion to Amazon founder Jeff Bezos’ personal fortune
Almost £170billion was added to the value of three American tech giants yesterday just 24 hours after the US economy recorded its biggest slump in post-war history.
Shares in Amazon, Apple and Facebook soared as investors cheered yet another set of bumper earnings figures.
The huge rally saw Apple shares soar to record highs of more than $412 each, with the firm overtaking state-backed oil giant Saudi Aramco to become the world’s most valuable listed company, with a market capitalisation of almost £1.4trillion.
Riches: Amazon founder Jeff Bezos with girlfriend Lauren Sanchez
At the same time, the bonanza on Wall Street added £5.3billion to Amazon founder Jeff Bezos’ personal fortune and more than £5billion to that of Facebook founder Mark Zuckerberg. But shares in a fourth tech giant – Google owner Alphabet – tumbled after it posted the first drop in revenues in its 22-year history.
The 5 per cent slide in shares saw around £18billion wiped off its value.
However, Amazon added £46billion to its value, Apple gained £85billion and Facebook more than £37billion.
The combined gains were worth more than the entire value of the UK’s biggest listed firm, the £120billion consumer goods group Unilever.
Together, the four US tech titans had reported an astonishing £156billion in sales for the three months to June 30, even as separate data showed the wider US economy had contracted by a record 9.5 per cent in the second quarter.
It underlined the gulf in fortunes between the companies, which have benefited from the shift towards digital services during the pandemic, and more traditional businesses which have been hammered by lockdown restrictions.
Roger McNamee, a longtime Silicon Valley investor, said: ‘The day we found out the US economy declined more than it ever has in history, these companies recorded extraordinary growth.’ Amazon is emerging as a major winner from the coronavirus crisis, with its second quarter revenues surging 40 per cent to £68billion as people stuck indoors turned to online shopping. Profits doubled to £4billion – despite the company previously saying it wasn’t expecting fireworks because of significant costs for making its warehouses ‘Covid secure’.
The results were even better than many Wall Street analysts had predicted, with Amazon handing a one-off £382 ‘thank you’ bonus to tens of thousands of frontline staff who worked throughout June. Sales in North America rose from £29.5billion to £42.3billion during the quarter, while international sales rose from £12.5billion to £17.3billion.
One Wall Street analyst branded the numbers ‘simply humongous’, while another said the firm’s ‘online sales hit the roof during the pandemic lockdown’.
And the subsequent surge in Amazon’s shares helped to further enrich Bezos, 56, who is already the world’s richest man with a fortune of more than £138billion. It was also a good day for Apple, after the iPhone maker posted a rise in sales of all of its major products from MacBook laptops to iPad tablets. The company posted revenues of £45.4billion – £3billion more than analysts had predicted. Facebook, meanwhile, also beat analysts’ estimates for quarterly revenue, as more businesses used its digital advertising tools to take advantage of a surge in internet traffic during the pandemic.
Total revenue at the social network rose from £12.9billion to £14.2billion, beating forecasts of £13.3billion. Daily active users also averaged 1.79billion for the period, an increase of 12 per cent compared to a year previously.
However, Alphabet sales dropped 2 per cent to £29.1billion after big advertisers cut back spending in the face of economic uncertainty