Tech Giants Growing Market Value During COVID-19 Pandemic
Global tech giants are taking advantage of the numerous business opportunities that the COVID-19 pandemic is opening up across the globe.
This was evident in the second quarter financial reports of the top 25 technology companies that saw the market capitalisation of the companies expanding quarter-on-quarter during a global health crisis.
According to the Data compiled by GlobalData, Apple’s second-quarter revenue was aided by the strong performance from its services and wearables business units despite COVID-19 disruption. This, according to the data, allowed the tech giant to gain substantial market share and emerged as the world’s most valuable company.
Speaking on the strong financial statements from global tech giants, Keshav Jha, Business Fundamentals Analyst at GlobalData, said: “Apart from its impressive Q2 performance, the announcement of the new iOS and new iMac during Apple’s annual developer conference (WWDC) in June 2020 seemed to have pleased investors with the company’s MCap rising by over 40% during the quarter.
“The second of the top 25 technology companies by MCap was Microsoft. The company’s business accelerated during the company’s Q3 ending March 31 2020 mainly driven by growth in its cloud usage, increased Xbox sales, and higher demand for Office commercial and Dynamics business solutions. The company’s decision to close its physical stores and invest in e-commerce operations to drive sales, as well as the announcement of regular quarterly dividend, helped its stocks reach a new high.
“In third place was Amazon Web Services (AWS), which recorded a huge surge in demand of its cloud services after the COVID-19 outbreak. Additionally, an increase in e-commerce retail demand due to lockdowns imposed by governments in major economies helped Amazon’s stock rise over 40% and its MCap crossed US$1 trillion mark in Q2 2020.”
Alphabet, Facebook and Tencent led in the digital advertising space with over 20 percent quarter-on-quarter growth in their market capitalisation. The report noted that in the last three weeks of Q1 2020, advertisement revenue of Alphabet and Facebook dipped slightly but started showing stability in the first three weeks of April.
This renewed interest in the advertisement of the two companies aided their stocks by 20 percent in April as investors remained strongly bullish due to an increase in consumer engagement on its services because of the quarantine and shelter-in-place orders.
Jha continued: “Although suspension of sports events affected Tencent’s media advertising revenue, its online advertisement and games revenues increased over 30% in Q1 2020, ended March 31, which seemed to help the company win over investors’ confidence.”
For major semiconductor companies such as Samsung, Taiwan Semiconductor, NVIDIA, ASML, Broadcom, Texas Instruments and Qualcomm their market value grew between 9 percent to 45 percent quarter-on-quarter during the period.
Jha adds: “The health crisis led to rise in demand for memory chips, mainly due to higher demand from cloud applications linked to remote working and online education. The continued investment in AI, 5G infrastructure, data center, autonomous vehicles and gaming also kept market interested in these stocks.”
While ServiceNow and Zoom were the two entrants on the GlobalData’s top 25 technology companies ‘my MCap list’. They both grew subscription revenues and widening customer base with ServiceNow closing 37 deals in the first quarter. Zoom usage surged by 75.6 percent quarter-on-quarter in the second quarter of 2020.
Jha concludes: “The economic downturn caused by COVID-19 has impacted all sectors, but the performance of tech stocks in Q2 suggests that investors believe they can successfully manage the headwinds from the health crisis. Tech companies are uniquely positioned to provide technology and resources to organizations and partners, which help in securely accessing and sharing data while working remotely. These companies are also playing pivotal role for consumers coping with lockdown measures, and in enabling health institutions and governments to maintain databases, which help in containing the spread of virus.”
Please note that the technology companies include software and hardware developers, IT services providers (including internet-based services providers), and electronics manufacturers including semiconductors, mobile devices etc.
Alibaba Merchants Sell $40B in First Half Hour of Singles Day 2020, More than 2019 Event Full Sales
Singles Day 2020 was a roaring success, cementing its position as the world’s biggest shopping holiday. Sales across Alibaba’s platforms during the event totaled $74.1 billion, up from $38 billion in 2019.
According to the research data analyzed and published by Stock Apps, within the first 30 minutes of the event, the gross merchandise volume (GMV) surpassed 2019’s full-event sales, reaching $40.87 billion.
Moreover, instead of live events, Alibaba had 400 company executives and 30 celebrities hosting livestreams. Based on a study by Coresight, the Chinese livestream market is set to rack in sales worth $125 billion in 2020, compared to $63 billion in 2019. The US livestream market is a small fraction of that, valued at $5 billion.
China’s Tech Heavyweights Lose $280 Billion in Market Cap
Alibaba Singles Day 2020 dwarfed other major shopping holidays as has been the trend in previous years.
According to Practical eCommerce, Amazon Prime Day 2020 sales totaled $10.4 billion up from $7.16 billion in 2019. Cyber Monday sales in the US amounted to $7.9 billion in 2020 according to Statista. Black Friday and Thanksgiving added $9.7 billion to the figure to make $17.6 billion for the weekend.
Similarly, in 2018, Singles Day sold $30.8 billion while Prime Day sold $4.19 billion and Thanksgiving weekend got $14.2 billion.
However, the 2020 Singles Day event came in the wake of Ant Group’s suspension of a $37 billion listing. The suspension resulted in a $76 billion drop in Alibaba’s market cap, as the tech giant owns a two-thirds stake in Ant Group. Moreover, China’s regulators released anti-trust draft rules prior to the event, aimed at controlling monopolistic behavior.
Following the release, Alibaba shares plunged by 9.8%, as JD.com shed off 9.2%. Tencent similarly saw a 7.39% drop and Xiaomi fell by 8.18%. For the five companies, there was a combined loss of $280 billion in market capitalization.
Top Three PC Vendors Shipped 121.5 Million Units in 2020, Lenovo Leads with 47.1 Million Shipments
Remote working and distance learning amid the coronavirus outbreak continue increasing global demand for PCs and laptops. After a sharp fall in the first quarter of 2020, global PC shipments have grown in the last six months, despite the effects of the COVID-19 crisis.
According to data presented by Stock App, Lenovo, HP, and Dell, as the world’s three largest PC manufacturers, shipped 121.5 million units in the nine months of 2020. With 47.1 million shipments in this period, Lenovo tops the global PC vendor ranking.
More than 187 Million PCs Shipped Between January and September, a 1.6% Drop YoY
The rise in smartphone usage and the global shift from hardware to cloud solutions had been driving a downturn in global PC shipment for seven years in a row. In 2011, 365.3 million units were shipped worldwide, revealed the Gartner data. By the end of 2017, this figure dropped by almost 30% to 262.7 million.
The 2018 shortage in Intel central processing units brought a new hit for merchants’ supply chains and cut global shipments to 259.7 million that year, under 2007 levels.
In 2019, 261.2 million PCs were shipped worldwide, which was a slight increase from 2018 figures. However, the COVID-19 outbreak triggered the biggest fall in shipment since 2013, as pandemic affected supply chains.
The Gartner data showed 51.6 million PC units were shipped in the first quarter of 2020, down 12.3% from the previous year. Between April and June, the market started showing signs of recovery, with global PC shipment rising by 2.8% YoY to 64.8 million.
Consumer demand for PCs due to remote working, home entertainment, and distance learning amid an ongoing pandemic, along with the strongest US PC market growth in a decade, drove the global market momentum in the third quarter of the year. Between July and September, 71.4 million PCs were shipped worldwide, a 3.6% jump year-over-year.
Statistics show that 187.8 million PCs were shipped worldwide in the nine months of 2020, a 1.6% drop YoY.
Lenovo`s Sales Rose in 2020, HP`s Market Share Dropped Down
The Gartner data also revealed that Lenovo, as the market leader, increased its market share in 2020, despite the COVID-19 pandemic. In the fourth quarter of 2019, the Chinese tech giant had a 24.8% market share, with 17.5 million shipments worldwide.
In the third quarter of 2020, the number of shipped units jumped by 8.3% YoY to 18.3 million, while its market share rose to 25.7%.
As the second-largest PC vendor globally, HP hit a 21.6% market share in the third quarter of 2020, down from 22.8% in December last year.
The Gartner data indicate that Dell’s market share, as the third-largest PC vendor globally, dropped from 17.2% in Q4 2019 to 15.2% in Q3 2020. The US computer technology company also witnessed the most significant drop in PC shipments among the top three vendors, with the figure falling from 12.1 million in December to 10.8 million in September.
FinTech Investments in Q3 2020 Drop by 16% Quarter-over-Quarter to $12.15 Billion
The total value of fintech investments worldwide fell by 16% quarter-over-quarter (QoQ) to $12.15 billion in Q3 2020. However, deal volume grew by 26% to 716 deals.
According to the research data analyzed and published by Comprar Acciones, the United States accounted for 64.7% of the total deal value, with 340 deals worth $7.85 billion.
Also, there were 25 mega-rounds during the period, accounting for 60% of the total funding value. Compared to Q2 2020, the total mega-rounds value increased by 64% to $6.4 billion, as non-mega rounds fell by 16%.
Payment Industry Deals Soar by 41% to $6.22B as InsurTech Grows by 63% to $2.5B
Payment industry deals took center stage, totaling $6.22 billion according to Global Data, marking a 41.9% QoQ increase.
The top five deals in the segment accounted for 58.4% of the total. Klarna bank had the highest raise, at $650 million at a post-money valuation of $10.65 billion. It made it the highest valued private fintech in Europe and the fourth highest globally.
Klarna, which is a buy now, pay later app, had 12 million monthly active users and 55,000 daily downloads. In H1 2020, its global transaction volume shot up by 44% YoY to $22 billion as revenue soared by 36% YoY to $466 million.
On the other hand, the insurtech sector raised $2.5 billion globally across 104 deals according to Willis Tower Watson. It marked a 63% increase in funding value and a 41% growth in deal volume. The number of mega-round deals in the segment increased by 50% QoQ.
Six mega-rounds drove 69% of the total insurtech funding. Top on the list was Bright Health with $500 million and another $500 million by Ki. Early stage companies in the sector grew by 57% QoQ during the period, compared to a record low of 42% in Q2 2020.
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