Apple, Microsoft and Alphabet said on Tuesday that their latest revenues and earnings had surged above the stock market’s already optimistic expectations, confirming that demand for their digital services and gadgets continued to soar as some countries began to emerge from the pandemic.

Apple

Apple’s profits almost doubled in its latest quarter to $21.7bn, as iPhone sales surged and anticipated component shortages failed to bite.

Apple’s overall revenues grew by 36 per cent compared to the same period last year, including a 50 per cent rise in iPhone sales, driving net income 93 per cent higher for the three months to June 26.

Though the pace of year-on-year growth was slightly slower than in the previous quarter, Apple still stretched far ahead of Wall Street’s targets on almost every metric.

Luca Maestri, Apple’s finance chief, told the FT that the quarter was “very, very strong across the board”, noting that its services revenues had hit a new record.

“Our install base of active devices also set a new all time record in all geographic segments,” he said, outperforming Apple’s own internal forecasts in the US and China.

Sales in the Americas grew by 33 per cent, while Greater China was up by 58 per cent.

Three months ago, Apple had warned of a $3bn-4bn hit to iPad and Mac sales due to component shortages, as the technology and automotive industries grappled with ongoing semiconductor supply restrictions. But Maestri said that the impact ended up being less than $3bn, with iPad sales up 12 per cent and Macs up 16 per cent.

Even as lockdowns lift, Apple services revenues grew by 33 per cent, including a June quarter record for the App Store and a particularly strong rebound in advertising revenues.

“Now that economies are reopening, we continue to see really strong demand for digital services,” Maestri said.

Microsoft

Microsoft ended its financial year on a strong note, posting a 21 per cent jump in revenue as it saw a flood of new business in areas like cloud computing, LinkedIn advertising and business applications.

The US software company’s sales and earnings comfortably topped most official Wall Street estimates, though its shares slipped back 2 per cent after a near-20 per cent rally in the last two months took its stock price to a record high.

Microsoft’s Azure cloud platform, one of the main engines of its recent growth spurt, had seen revenue growth slow in recent quarters as it became a much bigger contributor to the overall business.

But in the three months to the end of June, Azure growth accelerated, reaching 51 per cent. That was up from growth of 46 per cent in the preceding three months, and the fastest expansion rate in five quarters.

Satya Nadella, chief executive officer, said the figures showed that “when we execute well and meet customers’ needs in differentiated ways in large and growing markets, we generate growth, as we’ve seen in our commercial cloud”.

He also singled out the strong performance of newer businesses like gaming, security and LinkedIn. The professional networking site reported a 46 per cent jump in revenue, while the Dynamics suite of business applications grew by 49 per cent.

The surge in growth lifted Microsoft’s gross profit margin by nearly two percentage points, to 69.7 per cent. That was nearly a percentage point above expectations, and contributed to a 48 per cent jump in earnings per share, to $2.17.

Alphabet

Alphabet chief executive Sundar Pichai credited a “rising tide of online activity in many parts of the world” for driving profits almost three times higher than in the same period of last year.

Expectations were already high for Alphabet, with last year’s second quarter hit heavily by a sharp pullback in global ad spending as companies reacted to the onset of the pandemic.

As Wall Street had hoped, ad sales on the platform surged in the second quarter, pushing net income to $18.53bn — beating analysts’ estimates by around 10 per cent. Revenue for the period topped $61.9bn.

Google’s advertising sales grew 69 per cent from the same period in 2020, comfortably beating analysts estimates, according to data from FactSet. Specifically, advertising on YouTube saw a sharp jump, with sales hitting $7bn — up more than 80 per cent on a year ago.

“This quarter, publisher partners earned more than they ever have from our network,” Pichai told investors. “We also paid more to YouTube creators and partners than any quarter in our history.”

As analysts had predicted, the company benefited from pent-up demand for cloud services as many office workers continued to work from home. Revenue for that segment was up 50 per cent on last year, to $4.63bn, though it still posted an operating loss of $591m.

Shares in immediate after-hours trading were slightly higher.