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Saturday, February 4, 2023

The big five tech companies are easily weathering the US consumption slowdown

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A man remotely communicates with his family displayed on the tablet screen.Amazon

Second-quarter results from major tech companies have come in better than expected, with nuances. Big techs weathered the pandemic without losing their profits, and the fact that some of them’ earnings records are now showing signs of weakness is no obstacle to proving their resilience in a situation as volatile as the current one. With the exception of Twitter last week showcasing some accounts weighed down by uncertainty surrounding Elon Musk’s purchase process and a slight slowdown at Meta, the Big Five (Microsoft, Meta, Amazon, Google and Apple) have walked gracefully for a time , in which consumer desire shifts from buying goods to buying services. The largest unemployed in the technology sector was the manufacturer of Intel processors.

Alphabet, Google’s parent company, and Microsoft posted double-digit revenue growth in the second quarter and some breathing space for the coming months, calming investors who feared tech companies would be hurt by the economic slowdown. Alphabet shares rose 4% on Wednesday and Microsoft shares rose 3.8%, hours after their financial statements were released.

Meta, the parent company of social networks Facebook and Instagram, has reported its first quarterly decline, citing advertising budget cuts as the cause. Revenue fell to $28.8 billion in the second quarter, slightly below analysts’ median estimate of $28.9 billion. The company’s forecast was also missed. Shares fell as much as 8.7% on Wednesday, the biggest drop in two months.

Better painted stuff for Apple. Despite rising inflation, consumer reluctance, a stronger dollar and a logistical deadlock caused by periodic lockdowns in China, the stock price has risen in recent weeks and is on course for its biggest monthly gain in nearly two years, 15% more July. Its shares have outperformed Microsoft, Alphabet and Amazon this month, and are also posting gains on the S&P 500 and Nasdaq indices.

Apple reported second-quarter results that just beat Wall Street estimates, easing concerns that supply chain issues and an unstable economy would weigh on the tech giant’s sales. Sales of iPhone and iPad devices performed better than expected, although other products, including Macs and portable devices, fell short of forecasts.

Amazon also beat sales forecasts, despite investor concerns about a possible belt tightening from inflation-stricken consumers.

Amazon billed 7.26% more in the past half year than a year ago (237.60 million versus 221.500 million in the same period in 2021). The near-term outlook is good, as third-quarter earnings will rise on the Prime Video platform on the back of an increase in subscription fees — up nearly 40%. Shares rose 11% on Thursday after the bell rang. The e-commerce giant expects sales to be between $125,000 and $130,000 million for the three summer months, with profits of around $3,800 million.

However, the bonanza also includes the need for readjustments to eliminate costs, and following the expansive phase of the pandemic, the Jeff Bezos-founded and Andy Jassy-led company is now trying to eliminate excess storage space, at least with the sublease of 92 acres of hangars. Also of an undetermined number of employees, a general trend in the industry in recent months.

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Source elpais.com

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