Big Tech has Wall Street feeling down.
Big Tech failed to ease Wall Street’s concerns about slowing growth and the challenges the industry faces amid global economic uncertainty.
This week’s earnings reports confirmed that Big Tech companies are taking a hit from a slowing economy, Reuters reports.
The reports renewed questions about global economic demand, the effect of higher interest rates, and whether the market’s January rally got ahead of itself.
But the earnings also showed that Big Tech is still raking in tons of money.
Tech companies have been on a decade-long growth jag, creating a generation of investors and workers who are now experiencing their first significant experience of a downturn, layoffs, and retrenchment.
Tech giants Apple, Amazon, and Google parent Alphabet saw their stocks dip more than 3% after hours, CNN reports.
It came after Apple reported its first revenue decline in nearly four years, dropping down 5 percent, with sales and earnings falling below expectations. The tech giant blamed Covid and protests at a key Chinese factory for slowing its production of iPhone 14s.
Amazon beat investors’ earnings expectations but signaled that growth is slowing as customers are looking to chill on spending. Investors were still spooked by lower-than-expected revenue from its AWS cloud computing unit.
Alphabet also reported financial results Thursday that disappointed investors, with lower online ad spending on YouTube, cited as among the culprits.
The gloomy earnings reports come as the tech industry’s facing more glitches with the economy, troubles in the digital ad market space, and competition with the surge of artificial intelligence.
Meta did not have a bad day. Meta CEO Mark Zuckerberg is more than $12 billion wealthier today than 24 hours earlier, thanks to the Facebook parent company’s surging stock.
Earlier this week, it announced a restructuring plan to focus on company “efficiency.” It was apparently music to investors’ ears since Meta stock jumped around 20 percent.
All of the companies said their results would have been better were it not for the effect of a strong dollar, which effectively makes it harder to sell products overseas.