Tech giants' shares soar as companies benefit from Covid-19 pandemic

Tech giants Amazon, Apple, Facebook and Google released results on Thursday that showed just how richly the sector has benefited from the coronavirus pandemic, sending their already sky-high share prices soaring in after-hours trading.

On a day when the US announced economic growth overall had collapsed by a record-setting 32.9%, Amazon reported a profit of $5.2bn for the quarter and sales of $88.9bn, 40% higher than the same period last year. Amazon Web Services, the company’s cloud computing division, reported revenues of $10.8bn for the quarter – boosted as companies and consumers shifted online during the pandemic.

Related: Congress's historic tech hearing suggests antitrust crackdown could come soon

Facebook withstood an advertising boycott over hate speech in the month of July, beating analyst estimates for quarterly revenue. Ad sales, which comprise nearly all of Facebook’s revenue, rose 10% to $18.3bn in the second quarter. Facebook shares jumped 8% in extended trading following the results.

Revenue growth was the slowest ever since Facebook became a public company, reported at 11%, still better than analysts’ expectations that it would sink to 3%, according to IBES data from Refinitiv.

Mark Zuckerberg, the Facebook CEO, opened a call with investors on Thursday reporting a a record high 9 million advertisers in the quarter. Around 1,000 advertisers participated in the July boycott.

Zuckerberg struck a defiant tone on the call, criticizing the government’s response to the global pandemic and saying Facebook employees will not be returning to the offices for the foreseeable future.

“It is incredibly disappointing because it seems like the US could have avoided this current surge in cases if our governments had handled it better,” he said.

Zuckerberg added that because the pandemic appears to be continuing into election season, Facebook’s role in providing accurate election information and removing voter suppression on the app is “more important than ever”.

The CEO repeatedly touted Facebook as a supporter of small business and stressed its role in the increasingly online marketplace, saying he is “troubled” by calls to regulate the company or rein in targeted internet advertising.

“This would reduce opportunities for small businesses so much that would probably be felt at a macro economic level,” he said. “Is that really what policymakers want in the middle of a pandemic and recession?”

Apple posted revenues of $59.7bn for its fiscal third-quarter, surpassing Wall Street’s expectations.

“Apple’s record June quarter was driven by double-digit growth in both products and services and growth in each of our geographic segments,” said Tim Cook, Apple’s CEO. “In uncertain times, this performance is a testament to the important role our products play in our customers’ lives and to Apple’s relentless innovation.”

Google parent Alphabet’s revenues fell 2% to $38bn – the first decline in the company’s history – but were still better than analysts had expected.

Thursday’s results came a day after the tech companies were accused by Congress of wielding “too much power” in a historic committee hearing. The complaints against the tech giants were varied, but centered around criticisms that they have used their dominant position to quash rivals and overcharge the people and businesses reliant on their services.

“Facebook might still be a winner as far as much of its audience is concerned, but the world is changing and businesses are being scrutinized for their behavior ever more,” said Tamara Littleton, analyst and the CEO of social strategy firm the Social Element. “It may not be this year or even next, but in the long term unless Facebook can prove to advertisers and governments that it is able to act in a responsible and ethical manner, it may yet prove that there’s no such thing as ‘too big to fail’.”

The coronavirus appears to have been a boon to the tech giants. Amazon’s sales soared as consumers have turned to online shopping and Facebook announced it now has 2.7 billion monthly users, slightly higher than analysts had predicted. The company now counts 3.14 billion monthly users across its family of apps which include Instagram, Messenger and WhatAapp.

Ed Helmore contributed to this report