Despite strong results, big tech companies are under pressure. Dan Gallagher reports for The Wall Street Journal:
Having a low bar helps; Alphabet’s shares have risen only 16% year to date compared with the average 56% gain by Apple, Amazon and Facebook. The company also saw a sharp bounceback for its core Google advertising business, which reported its first-ever decline in the second quarter. It also announced plans to turn its Google Cloud business into a separate reporting segment starting with its fourth-quarter report. Amazon’s share price surged 118% in 2015 when the e-commerce giant started doing the same for its AWS unit.
Apple, by contrast, brought the day’s biggest disappointment, though not in its results for the quarter ended Sept. 26, which included better-than-expected revenue despite a delay in the launch of this year’s iPhones. The company declined to give a revenue forecast for the December period, which several analysts expect to kick off a “supercycle” of 5G iPhone sales. Analyst Toni Sacconaghi of Bernstein said Apple would need to guide expectations to or above the $101 billion in revenue Wall Street had targeted for the quarter “for investors not to be disappointed.”
The last speaks to the biggest risk facing the tech sector’s giants—one that will linger no matter the outcome of next week’s U.S. election. The problem is that regulators and lawmakers think Big Tech is too big and too powerful. The combined $228 billion in revenue just reported by Apple, Amazon, Alphabet and Facebook in the midst of a worsening pandemic won’t help them convince critics otherwise.
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