The Giants Stumble – Big Tech Earnings
Following a shocking earnings report from tech giant Meta, investors had their fingers crossed, waiting to hear similar news from yesterday’s tech behemoths to take the pedestal: Apple, Amazon, and Alphabet. Unfortunately, this group of triple-A’s didn’t seem to make the same cut as their counterpart Facebook did. Apple, which has strived recently amidst the current climate, saw its first quarterly revenue decline in roughly four years. In the previous quarter’s hint of uncertainty, Apple experienced manufacturing disruptions and Covid lockdowns in China that had a toll on delivering products to meet demand. Although the company has not provided guidance since the pandemic, they did however portray positive sentiment for the rest of the year, citing their gross margins to be between 43.5% and 44.5%.
On the e-commerce front, Amazon was successfully able to report large strides in its advertising services unit, growing 19% year-over-year and becoming a fierce competitor to the likes of Meta and Google. As a whole, they were able to beat Wall Street’s earnings expectations, but their declines in their online shopping and cloud-computing departments kept investors weary in the aftermarket. Furthermore, company guidance was weak going into the next quarter, as macroeconomic headwinds are estimated to slow growth within their biggest profit-making divisions. Google, which makes most of its revenue through advertising, didn’t seem to meet the same fate that Meta had. The search engine titan saw its first drop in ad revenue since the beginning of the pandemic, and only its second time since it was introduced to the stock market in 2004. Along with this unfortunate news, Google CEO Pichai seemed to keep shareholder’s amused, stating forthcoming developments in AI that will rival that of ChatGPT. Nevertheless, it seems that although some are remaining unscathed, even the biggest giants in the corporate world are enduring a difficult economic battle that may persist for months, if not, years.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.