Huge profits for Google, Microsoft and more!
Major big tech companies have released their quarterly earnings. We look at how some of the world’s biggest businesses performed so far this year!
Google, Microsoft, YouTube… All eyes are on the technology market as “Big Tech” reports their earnings for 2021 so far. As expected, profits accrued by some of the world’s biggest companies are truly staggering, however, investors will be keen to see how these businesses are adapting to a world forever changed by the ongoing pandemic. Remote working, cloud-based solutions, online shopping are just some of the sectors that have heavily influenced Big Tech in 2021.
We look at how some of the world’s biggest businesses performed so far this year!
Microsoft – “The Cloud” makes it rain billions
Microsoft reported earnings of $15.46 billion ($2.03 a share, up from $1.40 a share a year ago) and revenue of $41.7 billion (up from $33.06 billion compared to the same quarter in 2020).
Microsoft reported its largest revenue growth since 2018, driven in part by PC, console, and video game sales. Huge gains were made of Xbox, with the release of its new Xbox Series X and Series S consoles as well as millions turning to gaming during the pandemic.
The biggest winner is Microsoft’s Cloud. Many businesses sought online solutions with ongoing lockdowns and remote working now the norm. Azure, Microsoft’s cloud-based product, saw its sales increase by 50% in the first three months of the year.
Amy Hood, executive vice president and CFO of Microsoft, said: “The Microsoft Cloud, with its end-to-end solutions, continues to provide compelling value to our customers generating $17.7 billion in commercial cloud revenue, up 33% year over year.”
Future of Microsoft – Expanding The Cloud
Satya Nadella, CEO of Microsoft, said: “Over a year into the pandemic, digital adoption curves aren’t slowing down. They are accelerating, and it is just the beginning. We are building the cloud for the next decade, expanding our addressable market and innovating across every layer of the tech stack to help our customers be resilient and transform.”
Alphabet – Google and YouTube see huge revenue growth
Alphabet, parent company of YouTube and Google, saw its earnings grow across its businesses. It should be noted that the tech giant’s board approved a stock repurchase of up to $50 billion on April 23. Overall, total revenues of $55.3 billion were reported in the first quarter.
Shaking off an anti-trust probe in 2020, YouTube saw its revenue grow by $6 billion (+50%) as its “search ads” business model pays off as well as millions turning to watching videos on its platform during the pandemic. The biggest winner however is Google Cloud; with remote working increasing, the search giant’s online work solution saw $4.047 billion in revenue (up from $2.777 billion in revenue).
Future of Google – Investing in the Cloud, taking on TikTok
Like Microsoft, Google is heavily investing in its cloud-based solutions as this tech service provides a steady revenue stream to hedge against its ad-based model. YouTube’s TikTok competitor, Shorts, is growing rapidly; from 3.5 billion in January to 6.5 billion daily views by April 2021.
Sundar Pichai, CEO of Google and Alphabet, said: “Over the last year, people have turned to Google Search and many online services to stay informed, connected and entertained. We have continued our focus on delivering trusted services to help people around the world. Our Cloud services are helping businesses, big and small, accelerate their digital transformations.”
Advice for buying tech stocks
Buying into big tech company such as the ones mentioned in this article can be incredibly appealing. Technology’s biggest strength is also its biggest weakness – it is forever changing. Historically, the tech sector can offer booms (as was the case earlier in 2021) and disastrous drops (such as the dot-com crash of 2000). Tech companies can skyrocket and plunge with the times.
If you are interested in investing in your favorite technology company, you need to ask yourself the following:
- Do you understand how the company works?
- Does it have a competitive advantage over rivals?
- Can you trust the management or parent company?
- Is it growing?
If you answer YES to all these questions you might have spotted a great company to buy some shares in.
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