FT News Briefing US big tech companies report colossal earnings, US GDP down, companies cling to share buybacks
Jul 31, 2020
Major US tech companies like Facebook, Amazon, and Apple are raking in impressive revenues, even as the economy faces its sharpest contraction since World War II. There's a fascinating discussion about how these tech giants defend their market dominance in light of ongoing congressional hearings. Meanwhile, corporate America continues to cling to share buybacks, raising questions about their sustainability amidst rising unemployment and declining GDP. This juxtaposition between tech growth and broader economic struggles provides a thought-provoking perspective on the current market landscape.
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Big Tech Earnings
- Big tech companies like Apple, Amazon, Facebook, and Google benefited from the pandemic.
- Their earnings increased because people used their products and services more during lockdowns.
Tech CEOs' Claims vs. Reality
- Despite record profits, tech CEOs claimed their companies aren't too big and don't stifle competition.
- This contradicts their substantial market gains, highlighting a disconnect between Silicon Valley and the real economy.
Surprising Growth Despite Challenges
- Apple's sales grew by 11% despite store closures, exceeding expectations.
- Amazon's revenue increased by 40% and profits doubled, even with initial pandemic-related delivery challenges.