All this talk about blue chip companies needs to be washed down with some fast-paced, growth stocks. The tech industry is also reporting some vital earnings considering how bad this year has been for them, and we all know that interest rate hikes hurt them the most. Luckily for us, some Big Tech companies have reported results so far, and they have been mixed when we look further into the industries of the tech sector.
First is Microsoft, who missed on both earnings and revenue expectations. Their cloud services suffered a severe slowdown in sales, which posed a major problem and gave concern to other cloud companies. The positive effects of the pandemic on Microsoft’s business are starting to wear off as displayed by the cloud business and their worst quarter in years regarding PC shipments. Their video game business, fueled by the Xbox, saw a 6 percent decrease in sales amid a deal to acquire Activision Blizzard. Despite all of this, the company is up after-hours, signaling that investors expected worse.
Second is Alphabet, who reported the slowest sales growth in 2 years as the digital ad market is starting to dry up. This was already foreseen due to the results of social media apps Snap and Twitter the prior week, whose ad revenue got destroyed. They also missed on earnings and revenue, but once again they saw a boost in their stock price as investors believed that their digital ad sales would be worse given the circumstances.
Shopify is set to report earnings this morning, but they gave us a little sneak peek into the e-commerce world with their announcement on Tuesday. Shopify will lay off 10 percent of its global workforce as the company’s bet on the growth of the industry hasn’t panned out yet, with consumers returning to old shopping habits a bit more than expected. There’s still a lot more to go, and we’ll see if other tech companies continue to follow this trend.
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.