Apple, Google and Microsoft report record-breaking profits

Apple, Google and Microsoft all broke quarterly profit records for Q2 2021 as the tech sector continues to grow amid the COVID pandemic.

Increased cloud adoption, internet usage and the success of the latest iPhone have helped to strengthen the stock performance of three of the world's biggest companies - two of which have reached a market valuation of $2 trillion during the pandemic.

Apple: iPhone 12 success

Apple, the first company to be valued at $2 trillion, posted revenues of $81.4 (£58.5 billion) billion for the quarter ending June 26, an increase of 36% year-on-year.

This is largely down to the success of the iPhone 12 range, with sales up 50% at $39 billion. There were some reports earlier in the year that the iPhone mini hadn't done as well as expected, but the standard and Pro Max versions of the handset have proved extremely popular.

However, there are some concerns that this hot streak will be curtailed by the ongoing chip shortage, which has beset other sectors, such as the automotive industry. Apple itself is wary of the issue, pointing out that it has already started to affect its ability to produce Macs and iPads and could eventually affect its iPhone production; the firm even forecasted slowing revenue growth for the rest of 2021.

Google: YouTube, search and cloud growth

Google parent company Alphabet reported second-quarter earnings of $61.8 billion (£44.5 billion), a 62% increase year on year, with advertising revenues up 69%. The biggest increase, however, came from search which has shot up $14 billion since the same period last year at $35.8 billion. Many of its segments saw double-digit growth, like YouTube advertising, which brought in revenues near $7 billion, almost twice the $3.8 billion it generated last year.

The only real negative for Google was its cloud division, which continues to operate at a loss with $591 million written off in Q2. However, Google Cloud is still the fastest-growing segment of Alphabet's overall business with revenues of $4.6 billion, up from $3 billion last year.

Microsoft: Saved by the cloud

Microsoft pulled in revenues of $46.2 billion (£33 billion), up 21% year on year, but it wasn't all rosy for the Redmond tech giant. While the chip shortage is expected to hamper iPhone sales in the near future, it has already started to impact Microsoft's Windows and hardware segments, such as Surface laptops. Windows OEM revenue declined by 3% in Q2 and Surface sales dropped 20%, both of which were attributed to "supply chain constraints".

The company was still able to post record-breaking quarterly profits though, thanks to its commercial products and cloud services which increased 20%. This is the part of the business that includes its Azure cloud platform, but also Microsoft 365, which saw subscribers increase to 51.9 million - a 22% increase year on year.