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Big Tech flops on Q3 2022 results as Meta has its worst week ever


Facebook CEO Mark Zuckerberg

Marlene Awaad | Bloomberg | beautiful pictures

Other than Appleit was a big earnings week for Big Tech.

Alphabet, Amazon, Meta and Microsoft combined lost more than $350 billion in market capitalization after commenting regarding the third quarter and the rest of the year. Between slowing revenue growth – or a slump in Meta’s case – and efforts to control costs, the tech giants have found themselves in an unfamiliar position following the unbridled growth in past decade.

This week’s third-quarter business results come amid soaring inflation, rising interest rates and a looming recession. Apple went against the trend after beat revenue and profit expectations. Stocks on Friday had their best day in more than two years.

On the opposite end of the spectrum is Meta, which has seen its share price fall in 2022. Facebook’s parent company launched lack of incomerecorded its lowest average revenue per user in two years and said fourth-quarter sales are likely to decline for the third consecutive period.

“There’s so much going on right now in business and in the world, and so it’s hard to have a simple ‘We’re going to do this one thing, and that’s going to solve all the problems. title’,” Meta CEO Mark Zuckerberg said on the company’s earnings call on Wednesday.

Shares of Meta have had their worst week since the company’s IPO in 2012, down 24% in the past five days. Microsoft fell 2.6% for the week, due to a 7.7% drop on Wednesday after the company gave weak direction for the year-end and missed estimate for cloud revenue.

Things are also bleak in the Amazon, where 13% off. The dismal Q4 forecast coupled with a severe drop in the cloud computing segment was mainly responsible for the sell-off.

While Amazon Web Services showing a 27.5% slowdown in scaling from 33% in the previous period, Google’s cloud group, which is significantly smaller, accelerated to almost 38% from about 36%. Google plans to keep spending in the cloud even as it intends to curb total employee growth over the next few quarters.

“We’re excited about this opportunity, as businesses and governments are still in the early days of adoption,” said Ruth Porat, Alphabet’s chief financial officer. use the public cloud, and we continue to invest accordingly. “We remain focused on the long-term path to profitability.”

However, result from the rest of Google’s parent Alphabet is less impressive. The company’s core advertising business grew only slightly, and YouTube’s ad revenue declined year over year. The opposite has been true for Amazon, which is catching up with Google and Facebook in digital advertising. In Amazon’s advertising business, revenue growth speed up 30% from 21%, topping analysts’ estimates.

“Advertisers are looking for effective advertising, and our ads are at the point where consumers are willing to spend,” said Brian Olsavsky, the company’s chief financial officer. “We have a lot of advantages that we feel will benefit both our consumers and our partners like sellers and advertisers.”

Raymond James analyst Aaron Kessler lowered his Amazon stock price target to $130 from $164 after the results. Still, he maintained a buy rating equivalent to the stock, and said the company’s “strong advertising growth” is likely to help Amazon boost margins.

As investors continue to move away from technology, they are looking for opportunities to make money in other parts of the market that have previously lagged behind software and internet names. The Dow Jones Industrial Average is up 3% this week, its fourth straight weekly gain. Before 2021, the Dow had underperformed the Nasdaq for five years in a row.

CLOCK: Wall Street opens in the red as investors announce disappointing tech earnings

Wall Street opens in the red as investors announce disappointing tech earnings

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