Four of the country’s biggest technology companies — Apple, Alphabet, Facebook and Amazon — had the most profitable year on record.
Why it matters: Turns out the only thing better for Big Tech than the normal economy is the pandemic economy.
Between the lines: The stay-at-home economy helped Big Tech continue to grow profits, while its stocks drove the stock market higher.
Amazon joined a small club of companies whose sales have topped $100 billion in a single quarter.
- Apple reported last week that it hit this milestone in the last three months of the year. The only others in this club are Walmart and Exxon Mobil, which hit the mark for the first time in the early 2000s.
Alphabet’s sales rose 23% from Q4 2019, helped by a recovery in its ad sales business that showed signs of slowing in the middle of last year.
- It broke out operating income for its cloud business for the first time ever, which lost $5.6 billion last year.
The big question: Will the vaccination rollout and the eventual return to some semblance of normal help or hurt Big Tech?
What they’re saying: “We came out of the caves, we’re not going back. The habits of convenience that have been driven by the pandemic are only going to accelerate after the pandemic is over,” Ivan Feinseth, an analyst whose covered Big Tech stocks at Tigress Financial Partners since 2013, tells Axios.
- “Companies migrating to the cloud are going to continue. Companies allocating more and more money to digital advertising” will continue, Feinseth says — trends that benefit the Big Tech cohort.
- Feinseth has a “strong buy” rating on all the stocks.
The other side: Want an example of how disastrous the coronavirus was for certain industries? Look at Big Oil, which was pummeled as demand collapsed worldwide and prices tanked.
- Last year was the worst for Exxon since 1980, while BP reported its first annual loss in 10 years, results out Tuesday show. Chevron closed out its worse year since 2016, the company said last week.
The bottom line: The pandemic ravaged the economy last year. But the global shift in habits helped Big Tech companies continue their record-breaking profit streak.
Go deeper: The pandemic isn’t slowing tech