Alphabet, the parent company of Google continued to grow profits explosively in the first quarter of this year amid the Covid-19. So as Microsoft, the world’s largest software company.
The Wall Street Journal reported (4/27) that Alphabet recorded record sales in the first quarter of this year thanks to the expansion of the digital advertising market.
Alphabet posted $55.31 billion in sales in the first quarter, up 34 percent from a year earlier. However, a year ago was the time when advertising sales collapsed due to the impact of the Covid-19 situation.
Its net profit jumped 162 percent to $18 billion compared to the same period last year. Its earnings per share amount to $26.29, far surpassing Wall Street’s consensus (average earnings of $15.82).
Alphabet and Microsoft profits: the work of their subsidiaries
Sales of flagship products, including Google Search, Gmail, and Google Maps, rose 30% to $31.88 billion. As companies expanded their courtship to customers online.
YouTube’s sales also increased 49 percent to $6 billion as more people stayed at home due to telecommuting and remote classes requiring students to watch YouTube videos.
Google said it would purchase an additional $50 billion worth of its shares.
The WSJ stated that the solid performance reflects Google’s prominent position at the center of digital commerce as well as advertisers’ expectations that the resumption of the economy will proceed at the same time as the eruption of business activities.
Meanwhile, Microsoft made $41.7 billion in sales in the first quarter. It is up 19% from a year earlier, thanks to strong growth in its game and cloud business.
Its net profit also surpassed Wall Street’s expectations at $15.5 billion.
Microsoft also had a positive impact on the pandemic. As working and studying at home became a new norm, people used the company’s cloud computing services and video games.
In fact, sales related to the company’s cloud service “Azer” increased 50% from the same period last year. And sales of Xbox contents and services, video game consoles, also increased 34%.
The company’s market capitalization is close to $2 trillion as investors flock to Microsoft, which benefited from the Pandemic crisis. Microsoft’s market cap was $1.98 trillion at the close of the day. Apple (August last year) is the only U.S. company that has surpassed the $2 trillion mark in market capitalization.
However, WSJ reported that there are doubts in the market whether such explosive growth can continue after the Pandemic crisis.
