Big Tech – Apple, Alphabet, Amazon, Facebook, and Microsoft – all performed better over the past pandemic year than anyone dreamed. Last week, the five reported March-quarter earnings — the fourth full quarter since the COVID-19 lockdowns began early last year. All five beat Street expectations handily on both the top and bottom lines. As a group, these five companies grew March-quarter revenue by a combined 41%. Over the past four quarters, they expanded revenue by a combined 27%, growing their businesses by an aggregate $250 billion.
Facebook, with sales up 48%, and Microsoft, up 19%, had their fastest growth in any quarter since 2018. Apple, up 54%, and Alphabet, up 34%, had their best growth since 2012. And Amazon, up 44%, had its best quarter since 2011.
Now to be clear, these remarkable performances haven’t gone unrecognized. Since I wrote that piece, the five stocks have gains that vary from 85% for Microsoft to 135% for Apple. And while they aren’t the raging bargains of a year ago, there’s a case to be made that there are no better stocks to play the most important shifts in tech. Keep focused on these six trends:
• There’s no stopping the cloud
• Personal computers are back
• E-commerce won’t slow
• Advertising is back
• Chips and dips [semiconductor supply constraints]
• What could go wrong: Well, lots. Earnings comparisons will become hellacious. Some analysts think Apple’s fiscal 2022 sales growth could go negative… But I’m not backing off my original bullish call on the tech giants, just tweaking it: There are no better plays for the postpandemic world.
MacDailyNews Take: ‘Tis the fiscal Q2 tough compares to come and how the market digests / uses / abuses them, rationally or irrationally, that will be the most interesting for Apple.
After years of pent-up demand for iPhones with larger displays, when the company finally made them with the iPhone 6 and iPhone 6 Plus, Apple faced years of tough compares vs. fiscal Q215 until they finally just stopped reporting unit sales altogether.
Apple’s crazy Q221 revenue figure could stick out as a sore thumb for years and be used by naysayers, shorts, fomenters, etc. to talk down the stock every spring.