Why Apple, Amazon, Alphabet Are Collapsing - Bright Exceptions Microsoft and Meta

In the announcement of the financial results of the fourth quarter, Apple, Alphabet and Amazon proceeded on Thursday.

The economic slowdown is curbing demand for electronics, e-commerce, cloud computing and digital advertising, affecting big tech companies, eroding their revenues. The three giants, despite the big rise in their shares yesterday, which was affected by the results of Meta, after the session and after they announced their profits, they started to collapse.

Profits fall for Alphabet
Alphabet reported a drop in fourth-quarter earnings on Thursday, which fell short of Wall Street expectations as advertising slumped after the pandemic period, according to Reuters.

Executives at the tech giant struck a soft tone, promising an extended period of tightening, particularly on hiring, real estate costs and experimental projects that could take years to come to fruition.

Advertisers, which account for most of Alphabet's sales, have slashed their budgets as rising inflation and interest rates fueled concerns about consumer spending.

The company's CEO Sundar Pichai pointed to lower advertiser spending and the impact of foreign exchange rates as drags on Alphabet's overall results.

Amazon is on the same wavelength
Amazon's revenue has been squeezed by soft consumer demand for products sold online and slowing growth in a once-thriving business that provides remote computing power to companies.

The company reported an annual loss of $2,7 billion, its worst quarter since 2014.

The mainstay of profitability, cloud computing saw a significant decline, which contributed to the slowdown in sales growth. More worryingly, however, is that the company expects slower growth rates in the coming quarters.

The giant's stock has fallen 25% over the past 12 months, and is down more than 5% since the session.

Apple is also flourishing
Apple's sales fell more than analysts expected during the holiday quarter, hit by sluggish iPhone and Mac sales.

"The war in Ukraine, inflationary pressures, economic uncertainty and macroeconomic headwinds kept consumer sentiment weak in 2022, while smartphone users reduced their shopping frequency," writes Harmeet Singh Walia, senior analyst at Counterpoint Research. in a report on Apple.

Apple's revenue came in at 117,15 billion versus estimates of 121,10 billion, down 5,49% year-on-year.

Microsoft: Revenue growth despite ominous forecasts
With the main "weapon" of the cloud computing industry, Microsoft announced an increase in revenue for the second quarter of use for the period October-December 2022.

Contrary to analysts' forecasts of a decline, the company's profit came in at $52,7 billion, up 2% from the same period last year.

The cloud business is back in the spotlight after the success of OpenAI's ChatGPT chatbot.

"There are a number of ways we can bring this technology either to specific offerings or to enhance existing offerings," said Brett Iversen, Microsoft's head of investor relations. Additionally, he said that revenue from OpenAI-related businesses will appear in revenue for Microsoft's Azure cloud service in the future.

Rally for Meta
The company added about $75 billion to its market value after Thursday's rally.

Meta's move on Wednesday to rein in costs was a sharp and difficult decision for a company that has spent billions of dollars to turn its vision of the futuristic metaverse into reality, even as its core business has been rocked by the hard competition and the weak advertising market.

The results prompted at least 19 analysts to boost their price targets for the stock, with several saying a combination of lower costs, upbeat revenue growth and share buybacks will boost earnings per share.

Zuckerberg, who has spent the past year promising a future in a digital world called the metaverse, has called 2023 the "Year of Productivity." Meta, whose shares have gained 27% so far this year, is recovering from the worst year for its stock in history.

SOURCE: OT (link is external)