Big Tech Sees Record Growth In Revenue In Latest Quarter
The quarterly earnings of the Big Tech, released recently, points to the digital transformation the world is witnessing. The profits by Apple, Amazon, Alphabet, Microsoft, and Facebook by the end of Q2 in 2021 account for a third of the entire S&P 500 index.
Artificial intelligence is one of the major drivers of growth for Big Tech. Ever since the pandemic outbreak, YouTube registered 120 million viewers per month. Facebook’s revenue grew by 56% year-over-year during Q2’21.
Post pandemic, businesses shifted to a work-from-home setup. Leading cloud providers Amazon, Microsoft, and Google cashed in on the opportunity to provide infrastructure as a service (IaaS) through cloud regions.
Amazon is leading the pack with record revenue of $113.08 billion, followed by Apple’s $81.4 billion in this quarter. Alphabet came third with a revenue of $61.8 billion, while Microsoft is next with a record revenue of $46 billion, and Facebook clocked $29.08 billion, even as its shares fell by 5%.
Also read: How The Big Four Dodged Pandemic And Made Record Earnings
The iPhones sales shot up by nearly 50% on an annual basis. Compared to the June quarter last year, Apple sales are up by 36% in June 2021. Apple CEO Tim Cook said: “This quarter, our teams built on a period of unmatched innovation by sharing powerful new products with our users, at a time when using technology to connect people everywhere has never been more important. [sic]” However, even as Apple stock saw a dip of 2% in this quarter, its major product lines grew more than 12% on a yearly basis. The shift to inhouse M1 chips from intel on Ipads and Macs also contributed to the record growth.
Google’s total revenue for this quarter reached $61.88 billion, with increased ad revenue of $50.4 billion— up 69% compared to the same quarter last year. Advertising on YouTube brought in a record revenue of $7 billion, while Google Cloud reeled in $4.63 billion, exceeding analyst projections by a good margin. CEO Sundar Pichai told CNBC Google’s new company YouTube Shorts surpassed 15 million daily views compared to 6.5 billion daily views in March 2021.
Microsoft’s revenue shot up 21% year-over-year this quarter. Microsoft’s “intelligent cloud segment” comprising Azure public cloud, Windows server, GitHub, and SQL server generated $17.38 billion in revenue. Azure’s revenue rose by 51% year on year. Overall, Microsoft logged a record revenue of $46.15 billion.
Also read: OTT Wars Set To Intensify As Amazon Strikes Deal To Acquire MGM
Facebook largely benefited from digital ads–a 47% rise in average price per ad, according to a statement released by the tech giant. The networking site reached the expected 1.91 billion daily active users, with $10.12 average revenue per user. Facebook recorded revenue of $29.08 billion. The company is bullish on ‘metaverse’, a “virtual environment where one can be present with people in digital spaces.” CEO Mark Zuckerberg said, “In the coming years, I expect people will transition from seeing us primarily as a social-media company to seeing us as a metaverse company.”
It was a third $100 billion quarter in a row for Amazon this year. With strategised deployment of cloud regions, the big tech has established itself as the leading cloud infrastructure provider. Amazon achieved a record revenue of $113.08 billion, to which AWS’s contribution is $14.81 billion.
The revenue of Amazon Web Services grew by 37% in the second quarter, faster than 32% growth in the previous quarter. AWS revenue came in at $14.81 billion in the quarter, surpassing analysts’ estimated $14.20 billion.
Also, as the world got adjusted to being indoor, Amazon’s online retail was flooded with PPE and Covid related medical orders. In a statement after the release of Q2 earnings, CEO Andy Jassy said, “Over the past 18 months, our consumer business has been called on to deliver an unprecedented number of items, including PPE, food, and other products that helped communities around the world cope with the difficult circumstances of the pandemic.”
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