The Rise of Tech Through the Pandemic
By Alexander Gu
At the beginning of the pandemic in April 2020, Jeff Bezos, CEO of Amazon, declared that Amazon would be spending $4 billion in the following few months for the safety and wellbeing of customers and employees. Jeff Bezos expected 0 profit to be earned that quarter, due to this contribution, and told shareholders “You may want to take a seat.” At the close of July 2020, Amazon announced their quarterly results. Instead of the predicted $0 earned by Bezos, it had an operating profit of $5.8 billion, a new record for Amazon. The next months have established more records for the company. Amazon’s profit margins are the highest in its history.
Amazon’s success was similarly achieved by many other tech companies. The combined valuation of the tech giants Apple, Alphabet (Google), Nvidia, Tesla, Microsoft, Amazon, and Facebook increased by roughly 70% to hit $10 trillion. Silicon Valley, the world headquarters for tech startups, has had more companies go public in 2020 than in 2019, and have raised more than double the money. There are also 124 new tech billionaires since the start of the pandemic. In the first quarter of the pandemic, PayPal had gained 67 million active users.
Not all tech companies had such good fortune at the beginning, though. Redfin, a real estate brokerage, initially had its stock plunge to ⅓ of its original value. However, there was a turning point on April 7, 2020 according to Glenn Kelman, CEO of Redfin. He stated that “One part of the economy suffered greatly, but another did just fine — the people who said, ‘If the world is going to end in the virus-filled streets of New York, I’m going to Connecticut or Vermont or Maine, and I need a house there.’ What we thought was a headwind was a tailwind.” Airbnb, a company whose whole purpose is about staying in other people’s homes, had its IPO in December, 2020. It shared similar results as Redfin on April 7th. Its stock price doubled on the first day of trading, giving Airbnb a value of $100 billion.