Summary
- Amid COVID-19, numerous leading technology companies are not only holding steady, rather thriving to outpace the market.
- Recently, e-commerce behemoth Amazon unveiled its plans to acquire an autonomous vehicles builder, Zoox to boost its presence in the promising autonomous driving space.
- Amazon secured a deal with JV Trust of Brickworks and Goodman to open a new scalable facility in Oakdale West, Sydney to bolster its operational footprint across the Australian market.
- Microsoft made a strategic move to focus on the sale of its products through online platform, thus, resulting in a pre-tax charge of ~ US$450 million to be recorded in the quarter ending 30 June 2020.
COVID-19 which is said to have first originated in Wuhan, China, last year brought the economy worldwide and people’s movement to a standstill. Simultaneously, its adverse impact was witnessed in the stock market as well. However, amid the crisis technology sector has had been playing a defensive role riding on digital wave.
The last couple of months have witnessed a soaring demand for technology, with the massive digital shift witnessed among people through- work from home, online shopping, e-learning, digital payments, etc. There has been an increasing demand for e-learning applications, video conferencing apps, digital payment technologies, to name a few.
Globally, several technology stocks have performed fairly well both at the time of pre- coronavirus era and recovery period.
You must have heard of FAANG stocks. Well, this popular acronym FAANG is associated with a group of big US technology stocks that have been prospering on the accelerated digital wave, and have witnessed an enhanced consumer base and top-line growth.
Let us now apprise ourselves with two of the big technology giants.
Amazon.com, Inc. (NASDAQ:AMZN)
American multinational technology giant focuses on online marketplace platform, digital streaming, and cloud computing.
Amid lockdown and social distancing, the Company saw an increase speed shift to online shopping, as well as rising demand for its cloud computing due to businesses operating through remote locations.
Let us now shed some light on recent updates by the online retail giant:
BKW, GMG JV Trust obtains Amazon lease deal for Oakdale West Estate
On 30 June 2020 Brick manufacturer, Brickworks Limited (ASX:BKW) announced that the Company had obtained a lease pre-commitment with Amazon for 20 years (conditional on statutory approvals).
This deal is locked with a perspective of building a state-of-the-art distribution facility in Oakdale West Estate in Western Sydney on 14.9 hectares of land to be concluded by the second half of 2021.
This new distribution facility would be a landmark development for the JV Trust, a 50:50 joint venture between Brickworks and integrated property group, Goodman Group (ASX:GMG).
Online retail giant, Amazon is the second customer to pre-commit to Oakdale West, subsequent to the notification of supermarket giant, Coles Group Limited (ASX:COL) in January 2019.
After the two facilities are finalised, the gross assets held within the numerous JV Trust throughout Western Sydney and Brisbane are likely to be over AU$3 billion.
Source: Company’s announcement
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On 26 June 2020, Amazon announced that it inked a deal to acquire Zoox, a California-based entity, which is into building autonomous vehicles from the ground up, to strengthen Amazon’s presence in the promising autonomous driving space.
Zoox will continue its independent operations, and Amazon’s backing would speed up Zoox’s path in delivering safe, clean, and enjoyable transportation across the globe.
Furthermore, the transaction completion is subject to customary closing conditions.
As on 29 June 2020, Amazon’s share price stood at USD 2,680.38, marginally down by 0.46% from its previous day close.
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Microsoft Corporation (NASDAQ:MSFT)
The Company offers cloud-based services and software via its tools and platforms.
MSFT’s new approach; to sell products solely through an online platform
Microsoft has had physical retail stores for many years, though on a small scale. If anyone wanted to buy a product, they could simply visit the store, try a product first-hand and make a purchase. But that is all about to change as Microsoft is closing its physical retail stores across the globe and is shifting its focus towards online sales.
On 26 June 2020, MSFT announced a strategic change in its retail operations and stated that its retail team members would continue to serve customers from Microsoft corporate facilities and would provide sales, training, and support remotely.
This strategic move would result in a pre-tax charge (inclusive of primarily asset write-offs and impairments) of ~ US$450 million, which would be recorded in the quarter ending 30 June 2020.
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Acquisition of CyberX to boost IoT deployments for customers
On 22 June 2020, MSFT announced that it acquired a security start-up, CyberX; primarily, to fast-track and secure consumers IoT deployments.
It is believed that CyberX would complement the prevailing IoT security competence of Azure and would further expand to existing devices, comprising those utilised in industrial IoT, Operational Technology and infrastructure settings.
On 17 June 2020, MSFT’s board of directors announced a quarterly dividend of US$0.51/share, to be paid on 10 September 2020 to the stakeholders. It has a record date of 20 August 2020, following the ex-dividend date of 19 August this year.
On 29 June 2020, MSFT closed at US$198.44, up 1.07% from its previous close.
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