This week will go down in financial earnings history as one of the worst for Big Tech, and even a possible turning point.Wedbush Securities analyst Dan Ives pointed out Thursday.
Alphabet, the parent company of Google, achieved its weakest revenue growth this summer since 2013, apart from the start of the COVID-19 pandemic.
Amazon posted a 9% drop in third-quarter net profit and reported lower-than-expected revenue, sending its stock down 15% in electronic trading after Wall Street’s close on Thursday.
Zuckerberg continues to bet on the metaverse
As for Meta (Facebook, Instagram, WhatsApp, Oculus), it is a
disaster, according to Dan Ives. The title of the company plunged 19% on Wednesday evening, a consequence of profits halved to 4.4 billion US dollars (6 billion Canadian dollars), and especially comments from Mark Zuckerberg.
The founder of the Californian group insisted during the analyst conference on its priorities, namely
artificial intelligence technologies that make it possible to recommend Reels,
messaging advertising tools and
our vision for the metaverse.
” Those who are patient and invest with us will be rewarded in the end. »
But the immense deployment of resources to build a parallel world, accessible through augmented and virtual realities, is arousing growing skepticism, at a time when inflation and rising interest rates are eating into the margins of businesses.
There is no information on the potential in terms of income that Meta could derive from the metaverse. No one knowsnotes Debra Aho Williamson, analyst of Insider Intelligence.
Google is more likely to rebound quickly, because its search engine has been a bedrock of the Internet for decades, both for consumers and businesses. Its business model is not brokenshe elaborates.
Faced with global economic difficulties, many advertisers have cut their marketing budgets.
We knew that global ad spend was going to contract. But I think the worst is overnuance Tejas Dessai, analyst at Global X ETFs.
And it’s not that bad, the declines remain modest given the pressure on exchange rates and inflation.
The threat embodied by TikTok, on the other hand, is not about to disappear. In 2021, the entertainment app overtook Google as the world’s most popular website, according to Cloudflare.
But in terms of advertising revenue,
there is no possible comparison, recalls Debra Aho Williamson. Industry veterans are
still far ahead.
Tech companies are also suffering from an unfavorable comparison effect with 2021, when the pandemic was still hugely beneficial to online services.
Apple exceeds expectations
Only Apple has pulled out of the game, thanks to its indestructible iPhone.
We reached a new record for our in-service base welcomed Tim Cook, the boss of the company, highlighting a record number of customers who have traded in their smartphone or tablet to acquire a more recent model.
The apple brand exceeded market expectations with 90 billion US dollars (122 billion Canadian dollars) in sales (+8% year-on-year) and 20.7 billion US dollars (28 billion Canadians) of net income earned from July to September.
But the negative impact of the strong dollar is expected to increase over the holidays:
We expect currency effects to have a negative impact of nearly 10 percentage points year-on-yearwarned the chief financial officer of Apple, Luca Maestri.
Mac revenue will decline substantially in the current quarter compared to last yearwhen the company released a new laptop, he said.
Amazon is also counting on lower year-end sales due to the strong dollar. The e-commerce platform predicts that they will only increase by 2 to 8% over one year.
Microsoft, for its part, still driven by cloud computing (clouds), published strong quarterly results on Tuesday, but warned that Azure, its remote computing platform, would grow less quickly during the end of the year.