What’s happening: The first quarter of 2020 has been extremely challenging for companies big and small, with major economies grappling with the coronavirus outbreak. Equity markets have suffered massive swings, and the fear-gauge CBOE Volatility Index declined as much as 23.2% in the first quarter.
What happened: While COVID-19 is seen as the main culprit, this is not the sole reasons for the crumbling markets. The US-China trade war and Brexit had already caused distress. The more recent oil price war between Saudi Arabia and Russia have added to the woes.
The Dow recorded its sharpest first-quarter decline in history, while the S&P 500 and Nasdaq 100 lost 20% and 14% in the quarter.
Amid these challenges, the four US tech giants, which were termed as “MAGA” by President Donald Trump during his election campaign, have also been under immense pressure. In fact, the MAGA stocks lost $1 trillion in market value in a single day on March 17.
Here's a look at the performance of the MAGA stocks and one tech giant that has recorded gains.
How the MAGA giants performed: The four largest US tech companies - Microsoft, Apple, Google parent Alphabet and Amazon – are now known as “MAGA”.
Microsoft: This tech giant’s stock largely resisted the slump in US markets. The company’s shares closed the first quarter mostly unchanged at $157.71. Given the global lockdown scenario, the company has seen a steep rise in demand for its cloud-based products, including Microsoft Teams, which supports people working from home.
The Redmond, Washington-based company has also announced Microsoft 365 Personal and Family and launched a new interactive Bing map that provides information related to the COVID-19 outbreak.
Apple: The iPhone maker’s stock came under pressure in the first quarter, with both manufacturing and demand being impacted by the COVID-19 outbreak. The company’s shares declined by 13.4% in the first quarter.
The company's supply chain suffered a massive disruption, with store closures in China. With China now recovering from the virus, Apple is gradually reopening its stores in the region, but has had to shut down its global stores due to the spread of the pandemic. Even amid this, Apple is planning to launch iPhone 9 on April 15.
Alphabet: The Google parent’s stock ended the quarter on a negative note, with shares down 13.24%.
With the global stay-at-home trend, Internet usage has surged. However, Google is hit by the sharp decline in advertising revenue, as most companies are either closed or facing major financial issues.
Amazon: Amazon has emerged victorious among the MAGA stocks, with its shares rising in the first quarter. The company’s stock climbed 5.5% to end the quarter at $1,949.72.
The ecommerce behemoth is witnessing solid demand for home deliveries due to the coronavirus lockdown. Amazon announced another 100,000 job openings during the quarter to help facilitate the larger number of online orders. Amazon’s cloud services business – Amazon Web Services (AWS) – has also received significant investor attention. This subsidiary is the most profitable business for Amazon and caters to a diverse set of customers, including individuals, start-ups, small businesses, governments and large corporates.