OAKLAND, Calif. — 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.
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.
Amazon’s sales were up 40% from a year ago, and its profit doubled. Facebook’s profit jumped 98%. 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.
“The strong continue to get stronger,” said Dan Ives, managing director of equity research at Wedbush Securities. “As many companies are falling by the wayside, the tech stalwarts continue to gain muscle and power in this environment.”
The tech companies’ financial performance was a remarkable contrast to the overall health of the U.S. economy. The Commerce Department said Thursday that the country’s gross domestic product fell 9.5% in the second quarter of the year as consumers cut back spending. It was the steepest drop on record. Combined, the companies reported $28.6 billion in quarterly net profit, underscoring how regulatory scrutiny remains more background noise and a distraction for them than an imminent threat to their businesses.
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