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Big Tech Got Bigger, Big Oil Got Smaller During Virus Lockdown


1 / 4 that captured the peak of pandemic lockdowns is making the divide between Big Tech and Big Oil extra obvious than ever.

Facebook Inc. (FB), Amazon.com Inc. (AMZN) and Apple Inc. (AAPL) smashed analysts’ estimates on Thursday after buyers turned to grocery supply and iPhone leisure whereas cities all over the world shut down.

Less than 24 hours later, Exxon Mobil Corp. (XOM) and Chevron Corp. (CHV) reported historic quarterly losses that, whereas anticipated, confirmed simply how a lot gas demand plunged when flights have been grounded and commutes halted.

On a day when tech earnings provided a lift to the broader market, Exxon and Chevron shares fell. The divergence could also be extra stark because of the virus, however it’s a pattern that was beginning to take form even earlier than COVID-19.

“It’s the classic value versus growth conundrum,” mentioned Bloomberg Intelligence analyst Fernando Valle. “You can’t grow in oil right now. There’s no return for your growth.”

For Exxon, even the dividend is wanting precarious after years of heavy borrowing. And Chevron warned that, regardless of indicators of financial restoration, the remainder of the yr will proceed to be a difficult one.

“It’s an industry that really depends on access to capital,” mentioned Valle. “Big Oil is going to face an uphill battle.”

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