Amazon.com Inc (NASDAQ: AMZN), Apple Inc (NASDAQ: AAPL), Alphabet Inc (NASDAQ: GOOGL) and Facebook Inc (NASDAQ: FB) have all reported blowout results for the June quarter as demand for technology to connect us during the COVID-19 pandemic surges. The big United States tech stocks are benefitting from the shift to digital pretty-much-everything since the onset of coronavirus.
Revenue and profits grow
Apple reported year-on-year increases in revenue across all categories and jurisdictions with consumer demand for its products accelerating as many work and study from home. Facebook surpassed analysts' quarterly revenue estimates thanks to an increase in ad sales as monthly active users rose to 2.7 billion.
Amazon posted the biggest profit in its history as demand for its services soared during the pandemic. The world's largest online retailer saw revenue increase 40% year-on-year to US$88.9 billion. Google's parent company, Alphabet, beat market expectations with revenue of US$31.6 billion in the June quarter. The company's cloud business in particular outperformed, increasing revenue 43% year on year to over $3 billion.
ASX tech shares in the spotlight
So what does this mean for Australian technology shares? ASX tech shares have led the market comeback since March. The S&P/ASX All Technology Index (ASX: XTX) is up 90.1% from its March low, with the S&P/ASX 200 (ASX: XJO) up 30.7% over the same period. ASX tech shares like Afterpay Ltd (ASX: APT) and Kogan.com Ltd (ASX: KGN), have spearheaded the recovery as demand for digital solutions accelerates.
The Afterpay share price is up 678% from its March low, with growth in key financial metrics continuing unabated throughout the pandemic. Rather than slowing in the face of economic uncertainty, demand has accelerated as people turn to eCommerce and budgeting solutions simultaneously. Afterpay reported underlying sales of $11.1 billion in FY20, more than double those of the previous year. Sales accelerated in the fourth quarter, which recorded the highest quarterly performance ever, up 127% on Q4 FY19.
The Kogan share price is up 345% from its March low with the online retailer reporting a spike in sales when lockdowns took place. Gross sales increased 103% year on year in April and May driving a 130% increase in gross profit across the period. The tech company reported more than 2,000,000 active customers at the end of May with founder Ruslan Kogan telling the Australian Financial Review 'business is booming'.
Foolish takeaway
ASX tech shares are feeling the same forces as their American counterparts. The move to transacting, working, studying, and shopping online is driving more people to online retailers and payment providers. These forces show no sign of letting up while the pandemic persists, and may be lasting even after it subsides.
