{"id":5814,"date":"2020-07-30T23:02:11","date_gmt":"2020-07-30T23:02:11","guid":{"rendered":"https:\/\/aviancetechnologies.com\/blog\/blog\/the-economy-is-in-record-decline-but-not-for-the-tech-giants\/"},"modified":"2020-07-30T23:02:11","modified_gmt":"2020-07-30T23:02:11","slug":"the-economy-is-in-record-decline-but-not-for-the-tech-giants","status":"publish","type":"post","link":"https:\/\/aviancetechnologies.com\/blog\/the-economy-is-in-record-decline-but-not-for-the-tech-giants\/","title":{"rendered":"The Economy Is in Record Decline, but Not for the Tech Giants"},"content":{"rendered":"

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The Economy Is in Record Decline, but Not for the Tech Giants<\/h2>\n

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A day after lawmakers grilled the chief executives of the biggest tech companies about their size and power, Amazon, Apple, Alphabet and Facebook reported surprisingly healthy quarterly financial results, defying one of the worst economic downturns on record.<\/p>\n

Even though the companies felt some sting from the spending slowdown, they demonstrated, as critics have argued, that they are operating on a different playing field from the rest of the economy.<\/p>\n

Amazon\u2019s sales were up 40 percent from a year ago and its profit doubled. Facebook\u2019s profit jumped 98 percent. Even though the pandemic shuttered many of its stores, Apple increased sales of all its products in every part of the world and posted $11.25 billion in profit. Advertising revenue dropped for Alphabet, the laggard of the bunch, but it still did better than Wall Street had expected.<\/p>\n

\u201cThe strong continue to get stronger,\u201d said Dan Ives, managing director of equity research at Wedbush Securities. \u201cAs many companies are falling by the wayside, the tech stalwarts continue to gain muscle and power in this environment.\u201d<\/p>\n<\/div>\n<\/div>\n

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The tech companies\u2019 financial performance was a remarkable contrast to the overall health of the U.S. economy. The Commerce Department said on Thursday that the country\u2019s gross domestic product fell 9.5 percent in the second quarter of the year as consumers cut back spending. It was the steepest drop on record.<\/p>\n

Combined, the companies reported $28.6 billion in quarterly net profit, underscoring how regulatory scrutiny remains more background noise and a distraction for them rather than an imminent threat to their businesses.<\/p>\n

On Wednesday, a congressional antitrust panel questioned the companies\u2019 leaders \u2014 Jeff Bezos of Amazon, Tim Cook of Apple, Mark Zuckerberg of Facebook and Sundar Pichai of Alphabet \u2014 about their market power and business practices.<\/p>\n

It was part of a broader inquiry by regulators and lawmakers into the dominance of the tech giants, with open investigations from the Justice Department, the Federal Trade Commission and state attorneys general.<\/p>\n

The spectacle of the chief executives of the four companies, worth nearly $5 trillion by market capitalization combined, appearing before a House subcommittee was historic. But antitrust investigations often take years, especially if regulators seek more drastic measures like breaking up companies.<\/p>\n<\/div>\n<\/div>\n

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The pandemic has reinforced the advantages held by the big tech companies. As consumers stay home, demand for Amazon\u2019s shopping site surged, while companies are turning to its cloud computing products to keep their services up and running. Apple said the shift to working and learning from home had led more people to splurge on Apple\u2019s devices and use its services.<\/p>\n

\u201cOur products and services are very relevant to our customers\u2019 lives, and in some cases, even more during the pandemic than ever before,\u201d Luca Maestri, Apple\u2019s finance chief, said in an interview. He noted, however, that Apple could have made several billion dollars more if not for the pandemic.<\/p>\n

Facebook and Google continue to be important to marketers and they are weathering the downturn in advertising better than rivals. Facebook shrugged off a spending slowdown, hailing record levels of engagement with its products.<\/p>\n

Alphabet said revenue from Google search ads fell 10 percent \u2014 pushing the company\u2019s overall revenue lower for the first time in the company\u2019s history \u2014 but that still was better than rivals. Last week, Microsoft reported an 18 percent slide in search advertising revenue.<\/p>\n

Since the beginning of March, the companies\u2019 stock prices have risen by an average of 35 percent, compared with a 10 percent rise in the S.&P. 500.<\/p>\n