How the pandemic has changed the weather in the technology industry

THE TECHGAFAM.S&PGAFAM industry recently appeared to be sitting on cloud nine. One record after another fell when quarterly results were reported three months ago. Revenues had grown by 40% on average compared with the same period a year ago and profits by 90% for the five Western technology titans—Alphabet (Google’s parent company), Amazon, Facebook, Apple and Microsoft, collectively known as Indices of tech shares, such as the 500 Information Technology benchmark, climbed to stratospheric heights.If the latest round of quarterly earnings are any guide, the tech industry is coming back down to earth. Assuming that the pair meet analysts’ expectations, ’s revenues and profits will both have increased but by a more modest 26% and 39%, respectively. Share prices are languishing. The slowdown—or breather, if you will—provides additional evidence of the degree to which the pandemic has changed the tech industry. The question now is whether the sector is on a new trajectory or will revert to type over the next few years.