Illustration: Sarah Grillo/Axios

While the rest of the U.S. economy was falling off a cliff, Big Tech saw its business soar.

The big picture: Thursday morning, government economists reported a 30% drop in GDP for the second quarter — the largest decline, by far, since the numbers have been reported.

  • Thursday afternoon, Apple, Facebook, Amazon and Google — whose CEOs had spent Wednesday answering questions from Congress about their market dominance — reported better than expected financial results, despite the pandemic's ravages.

By the numbers: Apple saw iPhone and Apple Watch sales take a bit of a hit due to store closures, but stronger Mac and iPad sales helped the company crush expectations. Apple didn't give specific financial guidance for next quarter, but CEO Tim Cook said the company sees "a strong back-to-school season." However, Apple also confirmed this year's iPhones will ship a few weeks later than in the past.

  • Amazon smashed through analysts' predictions as customers shifted more of their spending online. The company turned a giant $5.2 billion profit, despite $4 billion in coronavirus-related costs. Revenue came in at nearly $88.9 billion, versus the $81.2 billion average forecast from analysts.
  • Facebook topped estimates despite both the impact of the pandemic as well as an advertiser boycott. Engagement numbers were also strong as people spent more time at home. However, Axios' Sara Fischer notes, Facebook's 11% year-over-year ad growth was its slowest quarterly expansion since the social network went public in 2012.
  • Google's parent company Alphabet saw its first-ever revenue decline, but results were generally better than anticipated. Much of Google's ad business is tied to industries like travel and hospitality, which have been devastated by the pandemic. CFO Ruth Porat said the company saw strong growth in Google Cloud and other revenues, and while she is "cautiously encouraged" by a small uptick in ad revenue, Google isn't out of the woods yet.

Yes, but: These giants' fortunes aren't divorced from the broader economy.

  • If the recession intensifies or turns into a long-term downturn, people will have less money to spend on, say, iPhones, and suffering businesses won't have budgets to buy ads on Facebook and Google.

Between the lines: While there was much for investors to cheer, critics may see the profits as a further sign of the companies' stranglehold on their respective markets — reinforcing the lines of attack laid out in Wednesday's House Judiciary Committee hearing.

Our thought bubble: Before the coronavirus, we handed our personal and professional lives over to Silicon Valley giants willingly. Now, as we work, shop, study and socialize via the technology they've built, it can feel like we don't have any choice.

  • That's bound to ratchet up the scrutiny on the companies that Rep. David Cicilline Wednesday called the "emperors of the online economy."
  • Today's fat profits could be denounced tomorrow as crisis profiteering. 

What's next: Beyond the financial results, executives sounded a further cautious note on any return to corporate offices.

  • Cook said Apple has pushed most of its return plans to next year.
  • Facebook CEO Mark Zuckerberg said there "is no end in sight" to work-from-home.
  • Google has already announced it won't return to its offices until July 2021.

Go deeper: Big Tech's power, in 4 numbers

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Ina Fried, author of Login
Sep 17, 2020 - Technology

Behind Facebook's giant bet on hardware

Photos: Facebook

Facebook's foray into virtual and augmented reality, which it doubled down on this week, is a bet on where the future of online social interaction is heading. But even more important to Facebook, it's also a plan to make sure the company owns a big piece of whatever platform ultimately supplants the smartphone.

Why it matters: In the smartphone era, Facebook has found itself at the mercy of Apple and — to a lesser degree — Google and Android phone makers. The company doesn't want to see history repeat itself.

Amazon defends working with oil companies to reach its zero-carbon goal

Kara Hurst in Seattle.

Partnering with oil and gas producers is necessary for Amazon and other companies to achieve their climate goals, the tech giant's chief of sustainability, Kara Hurst, said during an Axios virtual event on Thursday.

The big picture: Amazon aims to hit carbon neutrality in 2040, 10 years earlier than the Paris climate accord. The company plans to reach its goal in part by helping companies develop climate-friendly technologies through a $2 billion venture fund. The first recipients were announced on Thursday.

Ina Fried, author of Login
Sep 16, 2020 - Technology

Facebook updates Quest VR headset, will test sensors for AR glasses

Photo: Facebook

Facebook on Wednesday introduced a new version of its Oculus Quest and took the next step in a longer-term push toward augmented reality glasses.

Why it matters: Facebook has made big bets on virtual reality and augmented reality as key to its future and it is moving forward despite concerns from regulators and privacy advocates.