As Amazon outperformed expectations, Google and Apple on Thursday released disappointing statistics for the final quarter of 2022. They also issued a warning that the future months would be uncertain in a challenging time for Big Tech.
The day after Meta reported better-than-expected results and hinted at expenditure and employment layoffs, the tech titans disclosed earnings as shares in the company soared.
The results come after weeks of unheard-before layoff rounds in the often untouchable tech sector amid uncertainty about the future of the economy.
After a protracted period of astronomical growth during the zenith of Covid-19, when customers turned to the internet for work, shopping, and pleasure, the mood began to deteriorate.
Wedbush analyst Dan Ives tweeted, “Big Tech calls from Apple, Amazon, and Alphabet portraying a far different image of demand environment than the tech bears were expecting for.” He was alluding to investors who think share prices are headed lower.
Although there is “caution in the air,” according to earnings reports, there are indications that the corporations may be headed for soft landings, the expert continued.
Alphabet, the parent company of Google, reported fourth-quarter sales of $76 billion and a profit of $13.6 billion, both of which were lower than the company’s results for the same time a year earlier. Share prices dropped more than 3 percent in after-market trading.
Data provided by Factset shows that Google experienced a decline in its vital advertising sales, which were somewhat better than analysts had predicted.
It is obvious that the macroeconomic environment has grown more difficult following a period of notable acceleration in digital expenditure during the epidemic, according to Google CEO Sundar Pichai in an earnings call.
In order to stop the pandemic overhiring and concentrate on new areas, namely artificial intelligence, Pichai revealed last month that he planned to fire 12,000 workers.
The quick emergence of approachable AI, like ChatGPT, which is thought to be a possible threat to Google’s well-known search engine, took Google by a surprise.
The only US technology behemoth that has not disclosed significant layoffs in recent weeks is Apple.
The largest corporation in the world by market capitalization revealed a decline in quarterly revenue and profits for the final three months of last year, which was attributed to a decline in sales of its flagship iPhones.
Due to factories’ reduced output as a result of China’s zero-Covid regulation, which was just recently relaxed, Apple sales suffered.
Throughout the most of December, “COVID-19 related issues” that “substantially” decreased Apple’s supply of the iPhone 14 Pro and iPhone 14 Pro Max persisted, according to Apple CEO Tim Cook.
Apple’s sales for the same quarter a year ago was $117.1 billion, a decline of 5.4 percent, falling short of experts’ expectations.
Cook added, “We know that Apple is not immune to it. The globe continues to face unprecedented circumstances, from inflation to the war in Eastern Europe, to the persistent effects of the virus.”
Even though the company announced a significant round of layoffs to make up for a recruiting frenzy during the pandemic when business growth accelerated, Amazon nonetheless recorded an increase in sales driven by inflation.
On an earnings teleconference, Amazon’s chief financial officer Brian Olsavsky remarked, “Consumers are very selective about how they allocate their resources and where they choose to spend their money during moments of economic instability.
We observed them cutting back on discretionary purchases and switching to value brands with lower prices in sectors like electronics. The corporation announced last month that it would lay off more than 18,000 workers after the epidemic peak years added 800,000 more workers to the workforce.
Amazon’s quarterly sales of $149.2 billion were above the initial projections of the analysts surveyed by Factset, but the company’s profit plunged to almost nothing.
The CEO of Amazon, Andy Jassy, said, “In the short term, we face an uncertain environment, but we remain pretty confident about the long-term potential for Amazon.”
The Big Tech earnings deluge followed Meta’s announcement that quarterly sales dipped one percent, above estimates, and that Facebook’s daily user base had finally surpassed two billion.
The price of Meta’s shares increased by 23% by the close of business.