Tech income took a darkish flip this week with warnings in regards to the coronavirus and the election
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Tech companies had more to report on Thursday night than the billions in profits they made last quarter.
They also painted a terrible picture of the world as we move into the winter months, with Covid-19 cases in the US and Europe, and the potential for highly competitive presidential elections.
Amazon will Spend $ 4 billion on Covid-related expenses this quarter. That's the same investment that was made at the start of the pandemic when the country closed and turned to online shopping instead. Amazon will spend the money testing employees for viruses, cleaning facilities, and making other changes necessary to keep things going in the world of Covid. Amazon is well on its way to spending $ 11 billion for the year fighting Covid-19.
The company also said it could not accurately predict its operating results for the quarter due to the uncertainty caused by the pandemic. Amazon gave extremely far-reaching indications and forecast between $ 1 billion and $ 4.5 billion. Who knows where it will actually end up.
Tim Cook, Apple's CEO, said the company is finding it difficult to provide a revenue forecast for this quarter due to the surge in Covid-19 cases. "If you look at the number of cases, the number of cases is increasing in Western Europe," Cook told CNBC's Josh Lipton on Thursday. "They're climbing in the United States. And there is still a sufficient level of insecurity out there … we don't think this is an environment to guide yourself into."
With lockdowns restarting in countries like France and Germany, doubts have grown that people will be able to buy even the hottest device in the world in the coming months.
Facebook boss Mark Zuckerberg warned of unrest after election day next week. Facebook's core business isn't shipping and building things, so Zuckerberg's Q4 warning was different from his colleagues' but just as bad.
"I worry that given that our nation is so divided and the election results may take days or weeks to be final, there is a risk of unrest across the country," Zuckerberg said on Facebook's earnings call on Thursday evening. "With that in mind, companies like ours need to go way beyond what we've done before."
He also warned of an "increased risk of violence and riot".
These warnings come from some of the most accomplished business leaders in the world, with tons of data on the health of their businesses and decades of experience dealing with crises. They have a market value of trillions of dollars on the line. They are now sounding the alarm to their investors, showing they are ready to deploy the resources necessary to keep moving even if the rest of the world collapses.
These companies have the money to weather the storm. They'll be fine. They can spend billions adapting their shipping networks (Amazon), reshaping their retail and manufacturing operations (Apple), and tweaking their algorithms to suppress calls for violence and riot (Facebook).
It's not the same for the rest of the country. Small businesses like restaurants and retail stores struggle under pandemic restrictions with no economic stimulus in sight, while both political parties and their most ardent supporters are focused on winning the election. While big tech companies panicked, the US government had decided to wait until after the election to decide whether or not to provide assistance.
If you want to see a clear example of a K-shaped economic recovery, you've come to the right place. You win while the millions who depend on small businesses for a living lose.