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Tech Companies Profiting Big from COVID-19 Pandemic -GlobalData

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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.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Fintech

From Trading to Credit: Robinhood Launches No-Fee Credit Card with Gold Membership Perks

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Robinhood Markets Inc. has announced the launch of its highly anticipated no-fee credit card and it was accompanied by exclusive perks for Gold membership subscribers.

This bold move is a step in the company’s mission to evolve into a comprehensive financial services provider.

The Robinhood Gold Card boasts an array of enticing features. Chief among them is the absence of annual costs or foreign transaction fees, positioning it as an attractive option for consumers seeking financial flexibility.

Moreover, cardholders stand to benefit from a generous 3% cash back on all categories of purchases, a competitive offer in comparison to industry rivals.

Vlad Tenev, CEO of Robinhood, emphasized the company’s commitment to innovation and industry leadership in an interview.

He expressed the intention to not merely introduce a credit card, but to revolutionize the market with a product that sets new standards for customer satisfaction and financial empowerment.

The announcement has sparked enthusiasm among investors, with Robinhood’s shares witnessing a 6.9% surge in early market trading following the news.

This surge further underscores the market’s confidence in the company’s strategic direction and its potential to disrupt traditional financial services.

Beyond the credit card venture, Robinhood has been steadily diversifying its offerings. With the introduction of retirement products and the expansion of commission-free trading services internationally, the company is positioning itself as a formidable player in the global finance landscape.

As Robinhood continues to innovate and expand its suite of services, its trajectory suggests a promising future as a leading force in democratizing access to financial tools and services.

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Telecommunications

NCC Files Copyright Infringement Charges Against MTN Nigeria and Others

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Karl O Toriola - Investorsking.com

The Nigerian Copyright Commission (NCC) has taken legal action against MTN Nigeria Communications Ltd. and four individuals, including its Chief Executive Officer, Karl Toriola, over alleged copyright infringement.

The charges, filed in the Federal High Court, Abuja Division, revolve around the unauthorized use of musical works belonging to artist Maleke Idowu Moye.

According to the NCC, the defendants are accused of offering for sale, selling, and trading musical works of Maleke without his consent between 2010 and 2017. These works were allegedly used as Caller Ring Back Tunes without proper authorization.

The musical pieces in question include popular tracks such as “911,” “Minimini-wanawana,” and “Stop racism,” among others.

The commission further alleges that the defendants distributed these musical works to subscribers without authorization, infringing upon the rights of the artist.

The charges are based on provisions of the Copyright Act, Cap. C28, Laws of the Federation of Nigeria, 2004.

As the case awaits assignment to a judge and a fixed date for mention, it marks a significant development in the ongoing efforts to uphold copyright protection in Nigeria’s telecommunications sector.

This legal action underscores the NCC’s commitment to safeguarding the intellectual property rights of artists and creators within the country.

MTN Nigeria, a major player in the telecommunications industry, now faces a legal battle that could have broader implications for how intellectual property rights are respected and enforced within Nigeria’s digital landscape.

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Telecommunications

MTN’s MoMo Sees 32.2% Surge in Transaction Volumes

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MTN Nigeria - Investors King

MTN Group’s mobile money platform, MoMo, has experienced a 32.2% surge in transaction volumes.

With 72.5 million active users, MoMo continues to solidify its position as a leading fintech service provider in Africa, tapping into the continent’s burgeoning mobile banking sector.

The company’s success underscores the growing trend of Africa’s young and tech-savvy population embracing mobile technology to address financial needs.

Mobile phones are increasingly becoming a tool for bridging gaps in services, particularly in banking, presenting a lucrative opportunity for wireless carriers like MTN to capitalize on the burgeoning fintech market.

MTN’s achievement comes as it finalizes a deal with Mastercard Inc., valuing its fintech business at an impressive $5.2 billion.

This strategic partnership further enhances MTN’s position in the digital finance space, positioning it for continued growth and innovation.

However, MTN is not alone in its fintech endeavors. Rivals such as Airtel Africa Plc, Safaricom Plc, and Vodacom Group Ltd. are also making strides in digital transformation, with plans to separate and monetize their fintech businesses in the long term.

Airtel Africa, for instance, is reportedly considering an IPO for its mobile money unit, indicating the high stakes and intense competition within the sector.

Despite the remarkable success in its fintech ventures, MTN faced challenges in its core telecommunications business, with service revenue growth slowing to 6.8%.

Inflation and currency devaluation in key markets, particularly Nigeria, impacted profitability, highlighting the complexities of operating in diverse African markets.

As MTN continues to expand its fintech footprint and invest in infrastructure to enhance connectivity across the continent, it remains poised to capitalize on the immense potential of Africa’s digital economy.

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