Google and Apple disappoint with dismal tech revenues

The tech titans gained as shares of Meta skyrocketed a day after it reported better-than-expected results and signaled cuts in spending and jobs.

The results follow weeks of unprecedented rounds of layoffs in the usually untouchable technology sector amid pessimism about the economic outlook.

The gloomy mood followed a long period of excessive growth during the peak period of Covid-19, as consumers turned online for work, shopping and entertainment.

“Big Tech calls from Apple, Amazon and Alphabet paint a very different picture of the demand environment than the tech bears had hoped,” tweeted Wedbush analyst Dan Ives, referring to investors who believe stocks are on a downward path.

While earnings reports show “caution is in the air,” there are signs the companies are heading for a soft landing, the analyst added.

Google parent Alphabet’s fourth-quarter revenue was $76 billion and earnings were $13.6 billion, down from the same period a year earlier, with stock prices down more than 3 percent in post-market trading. scholarship.

Google saw a slump in its crucial ad sales, which came in slightly better than analysts had predicted, according to data collected by Factset.

“It is clear that after a period of significant acceleration in digital spending during the pandemic, the macroeconomic environment has become more challenging,” Google CEO Sundar Pichai said in an earnings call.

Pichai last month announced a plan to lay off 12,000 employees to end pandemic overhiring and focus on new areas, especially artificial intelligence.

Google was caught off guard by the sudden emergence of easy-to-use AI like ChatGPT, which is seen as a potential rival to Google’s popular search engine.

Apple is the only US tech giant not to announce major layoffs in recent weeks.

The world’s largest company by market value last year reported a drop in quarterly revenue and profit for the last three months, hit by a drop in sales of its flagship iPhones.

Apple’s sales were hit by factory production restrictions due to China’s zero-Covid policy that was only recently lifted.

“COVID-19-related challenges” that “significantly” reduced Apple’s shipments of iPhone 14 Pro and iPhone 14 Pro Max lasted most of December, Apple CEO Tim Cook said during an earnings call.

– ‘Unprecedented Circumstances’ –

Apple’s revenue was $117.1 billion, down 5.4 percent from a year ago for the year-earlier quarter, missing what analysts had predicted.

“The world continues to face unprecedented circumstances, from inflation to war in Eastern Europe to the lasting effects of the pandemic, and we know Apple is not immune,” said Cook.

Amazon, meanwhile, reported inflation-fueled sales growth despite announcing a massive round of layoffs to correct for a staff shortage during the pandemic as business growth accelerated.

“During periods of economic uncertainty, consumers are very careful about how they allocate their resources and what they spend their money on,” Brian Olsavsky, Amazon’s chief financial officer, said during an earnings call.

“We saw them spend less on discretionary categories and move to cheaper items in low-cost brands in categories like electronics.”

Last month, the company said it would lay off more than 18,000 workers after increasing its workforce by 800,000 during the peak years of the pandemic.

Amazon’s sales of $149.2 billion in the quarter beat initial forecasts from analysts polled by Factset, but profits took a huge hit, dropping to near zero.

“In the near term, we face an uncertain economy, but we remain quite optimistic about the long-term opportunities for Amazon,” said CEO Andy Jassy.

The Big Tech revenue dump came a day after Meta said its quarterly revenue fell by one percent, beating expectations, and announced that the number of daily users on Facebook reached two billion for the first time.

Shares in Meta ended the formal trading day up 23 percent.

AFP