While Amazon outperformed expectations in the final quarter of 2022, Google and Apple cautioned that the months to come would be uncertain in a difficult time for Big Tech on Thursday.
The tech giants reported earnings as Meta’s shares skyrocketed a day after it announced spending cuts and better results than expected.
The outcomes come after weeks of unprecedented rounds of layoffs in the usually unstoppable tech industry amid pessimism about the outlook for the economy.
During the peak of Covid-19, when consumers used the internet for work, shopping, and entertainment, there was a prolonged period of enormous growth, which led to the deteriorating mood.
Wedbush analyst Dan Ives tweeted, “Big Tech calls from Apple, Amazon, and Alphabet painting a much different picture of demand environment than the tech bears were hoping for.” He was referring to investors who believe that shares are heading in the wrong direction.
The analyst added that, despite the fact that earnings reports indicate that there is “caution in the air,” there are indications that the businesses may be headed for soft landings.
Alphabet, the parent company of Google, saw its fourth-quarter revenue of $76 billion and profit of $13.6 billion decrease from the same period a year earlier, causing share prices to drop by more than 3% in after-market trade.
Data compiled by Factset indicates that Google’s crucial advertising sales decreased, but were slightly better than analysts had anticipated.
During an earnings call, Google CEO Sundar Pichai stated, “It’s clear that after a period of significant acceleration in digital spending during the pandemic, the macroeconomic climate has become more challenging.”
Pichai made the announcement a month ago that he would lay off 12,000 employees in an effort to end the pandemic of excessive hiring and concentrate on new areas, particularly artificial intelligence.
The sudden rise of user-friendly AI like ChatGPT, which is seen as a potential competitor to Google’s popular search engine, surprised Google.
In recent weeks, Apple is the only US tech giant that has not announced significant layoffs.
Due to a decrease in sales of its flagship iPhones, the world’s largest company by market value reported a decline in quarterly revenue and profits for the final three months of the previous year.
Due to China’s recently lifted zero-covid policy, factories’ reduced production hurt Apple sales.