Select tech stocks weathered the storm for the shortened trading week amid mounting antitrust and regulatory concerns around the globe.
Amazon.com Inc. came out on top for the week after the U.S. Department of Defense on July 6 canceled its planned $10 billion cloud-computing JEDI contract that had been awarded to Microsoft Corp. in 2019. The department initiated a new multivendor plan to be split between Microsoft and Amazon.
The department in a prepared statement said that "due to evolving requirements, increased cloud conversancy, and industry advances, the JEDI Cloud contract no longer meets its needs."
In an emailed statement, an Amazon spokesperson said, "We understand and agree with the DoD's decision. Unfortunately, the contract award was not based on the merits of the proposals and instead was the result of outside influence that has no place in government procurement."
AWS has been widely considered the market leader in cloud computing, though Microsoft's cloud unit for the first quarter of 2021 reported more in quarterly revenues than AWS due to Microsoft's inclusion of server products in its Intelligence Cloud division, which also encompasses sales of Microsoft's Azure cloud services. AWS reported $13.50 billion in revenue during that reporting period, while Microsoft's Intelligence Cloud division reported revenue of $15.12 billion.
Shares of Amazon closed July 8 at $3,731.41 apiece, up more than 6% for the week to date, while Microsoft remained flat, closing at $277.42 per share.
In other tech affairs, shares of Google LLC parent Alphabet Inc. were almost unresponsive to news of 36 states and the District of Columbia filing an antitrust lawsuit against the tech giant on July 7, alleging it operates an illegal monopoly in the Google Play app store.
The suit, filed in a U.S. District Court in San Francisco, claims that Google invoked competitive restrictions to only allow apps for Android to be sold on the Google Play Store and added that the company used a gatekeeping rule to force apps — including those directly competing with Google offerings — to return large amounts of in-app revenue back to the company.
Charlotte Slaiman, competition policy director at Public Knowledge, a Washington, D.C.-based consumer rights group, said in a July 8 statement that additional action from Congress is necessary to give enforcement agencies better tools to address Big Tech matters.
"This bipartisan group of state attorneys general agrees that as our online experience becomes more mobile, consumers are facing higher prices and fewer choices because of Google's control," the statement said.
Wilson White, Google's senior director of public policy, said in a July 7 blog post that the lawsuit contains inflammatory language designed to distract from the fact that Android and Google Play benefit consumers.
"This lawsuit isn't about helping the little guy or protecting consumers. It's about boosting a handful of major app developers who want the benefits of Google Play without paying for it," Wilson said.
Alphabet closed at $2,500.88 per share for the week ended July 8, roughly flat for the week to date.
Pivoting to Twitter Inc., the microblogging giant took a hit this week after the Indian government said the company no longer has legal immunity for user-generated content, as the company purportedly failed to follow the country's new IT rules.
According to a report in May, Twitter only partly fulfilled requirements under the law, as it only shared contact details of an external lawyer acting as its grievance officer and nodal contact person, despite the law calling for such officers to be the company's direct employees.
The Indian government has been urging internet and social media services since 2011 to monitor and filter offensive content on their platforms.
Twitter shares closed at $66.83 for the week ended July 8, down more than 3% for the week to date.
The S&P closed July 8 at 4,320.82, down 0.7% for the trading week to date.