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Big Tech’s cloud computing surge won’t offset the pandemic’s financial pitfalls

Reuters
Can Big Tech weather the pandemic?
  • Amrita Khalid
By Amrita Khalid

Tech reporter

The world is spending more time online and indoors due to the pandemic, which should be a win for the world’s biggest tech companies. But earnings calls from Alphabet, Microsoft, and Amazon this week paint a more complicated picture of how the pandemic has impacted their business.

Thanks to a global shift toward remote work, school, and increased time spent indoors, the demand for cloud services has soared. In earnings calls this week, Alphabet, Microsoft, and Amazon all reported a considerable boost in cloud revenue. But the surge in cloud spending only really benefited Microsoft, which isn’t as vulnerable to two areas hard-hit by the pandemic: advertising and shipping and logistics. 

Beyond the impacts of cloud services, Alphabet’s earnings, which rely primarily on Google advertising revenue, took a hit this quarter as businesses cut back on ad spending. And despite record sales on Amazon, the company expects to churn through that revenue pretty quickly to mitigate the risk of coronavirus in its facilities. Here’s a look at how each company has weathered the storm. 

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