As Meta Shares Soars, Tech Giants Expect Earnings

Agencies

San francisco: Big Tech companies Google, Apple, and Amazon will release their most recent financial reports on Thursday as Meta shares soar after the Facebook owner posted better-than-anticipated results and suggested spending reductions.

The results from the largest tech businesses in the world come after several weeks of record layoff rounds in the often untouchable sector amid concerns about the future of the economy.

After a protracted period of disproportionate growth during the zenith of Covid-19, when people turned to the internet for work, shopping, and pleasure, the mood began to deteriorate. Sales decreased last year, for the first time since the business went public in 2012, Meta reported on Wednesday, as was expected.

Meta Platforms doing business as Meta and formerly named Facebook is an American multinational technology conglomerate based in California. The company owns Facebook, Instagram, and WhatsApp, among other products and services. Facebook (FB) changed its corporate name last fall to Meta, part of a strategic shift in focus from social media to a future, immersive — and so far largely theoretical — form of the internet powered by augmented reality (AR) and virtual reality (VR) technologies called the metaverse.

The social media behemoth reported a one per cent decline in sales to $116.6 billion and simultaneously announced that Facebook had reached 2 billion daily users for the first time.

Facebook Chief Executive Officer (CEO) Mark Zuckerberg, though, expressed optimism for the future, citing the popularity of short videos and AI, which boosted ad delivery when Apple made it more difficult to target customers on the iPhone.He also gave investors assurances that Meta would make riskier choices and operate much more quickly, making hints at additional layoffs and budget cuts.

As the markets closed later in the day, Meta’s shares rose as much as 25 per cent, establishing a high standard for the subsequent earnings reports from the other tech giants.

Following Meta’s lead, Google’s parent company is anticipated to report a decline in ad sales as well. This would be the search engine giant’s second quarterly decline since going public in 2004.

The quick growth of user-friendly AI like Chat GPT, which is seen as a potential competitor to Google’s all-powerful search engine, took Google off guard as the company has long viewed itself as a leader in innovation.

Google CEO Sundar Pichai announced a plan last month to fire 12,000 employees in order to stop a pandemic of over hiring and concentrate on emerging fields, particularly artificial intelligence. Software/Data company Fact Set surveyed analysts who forecast a decline in quarterly ad revenues, which account for more than 80 per cent of the business’s revenue, to $60.4 billion from $61.2 billion in the prior quarter.

Glimpse on Demand

Apple is the only big tech company that has not yet announced significant layoffs in recent weeks. Investors will closely monitor how Apple’s sales have been impacted by China’s zero-Covid policy, which was only recently lifted.

China continues to be the primary location for iPhone production, and the severe limitations have a negative impact on Apple’s ability to export the iPhone 14 during the crucial holiday shopping season.

Analysts predict that Apple, the largest corporation in the world by market value, will experience a decline in activity, with quarterly sales of $121.5 billion falling short of the $123.9 billion they posted a year ago.

“The most important earnings for the market will be Apples, which will give a glimpse into the overall demand story for consumers globally while giving a snapshot of the China supply chain issues starting to slowly abate,” said Wedbush Securities Analyst Dan Ives.

According to the International Data Corporation, worldwide smartphone shipments declined 18.3 percent year-on-year to 300.3 million units in the fourth quarter of 2022. Despite the company announced a significant round of layoffs to make up for a recruiting frenzy during the pandemic when business growth accelerated, Amazon is anticipated to record sales growth driven by inflation.

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.

Analysts polled by FactSet said sales at the online store would rise to $145.7 billion, up from $137.4 billion a year before. Net profit at Amazon would however take a massive hit, they said, falling to just $2 billion from $14.32 billion a year ago.