America's tech giants seemed invincible. After the boom that they experienced as a result of digitization during the pandemic, nobody thought that investors would stop trusting them in a short time. In the last decade, Amazon, Apple, Alphabet, Meta and Microsoft had been unperturbed by the situation, with stratospheric rises in their stock market valuation. However, inflation and the rise in interest rates this year have dashed expectations of unbridled growth. The quarterly results presented this week by the five big tech companies confirm the change in trend and, except in the case of Apple, investors have lowered their stock market valuation in a way they haven't done for a long time.
The most significant case has been that of Meta, the parent company of Facebook, Whatsapp and Instagram, whose share dropped -24% last Thursday. In perspective, its value has fallen back to 2016 levels. And what is even more alarming: in just one year, Meta has gone from being worth 1 billion dollars and being among the five most valuable companies in the world, to being worth 270,000 million and disappear from the top 20. Investors do not trust his transition plan from social network to leader of the metaverse, a bet started a year ago and which has shown slow progress. Meanwhile, its main source of income, advertising, is declining. "There's a lot going on in the world and in business," Mark Zuckerberg acknowledged Thursday. The CEO said there are macroeconomic issues affecting digital advertising, a lot of competition, especially from Apple (and its restrictive app store policy), and a long-term investment in the metaverse. "Those who are patient will be rewarded," Zuckerberg said. But his words were unconvincing against the data. The profit of the third quarter of the group fell more than 50%, to 4,433 million euros, income fell by -4.5% to 27,956 million, while costs increased by 19%.
The electronic commerce giant also presented disappointing results – the share fell 19% – with no prospect of reversing the situation in the months remaining to the end of the year. However, the results from July to September were not the worst of the year. Revenue from the same period last year grew 15% to 127 billion, while the company recovered profits after two previous quarters in losses. However, the cloud services division, where great growth expectations are concentrated, registered a decrease in revenue of -24%. The investor has also not forgotten the withdrawal of its ambitious expansion plans launched during the pandemic.
The company founded by Bill Gates recovered part of Wednesday's bump but closed the week with a 3% drop, while in the year as a whole the share has left more than 30% of its value. The company, which presented results for the first quarter of its fiscal year, registered an increase in revenue of 11%, to 50,100 million, the slowest rise in revenue in the last five years. The causes: the fall in sales of personal computers and the strength of the dollar. In addition, the rise in costs reduced profits by 14%, to 17,400 million euros.
Like its colleagues, the parent company of Google and YouTube presented results that displeased investors, who reduced the value of the company by around 5% at the end of the week. Affected by the drop in advertising due to the economic situation, the firm saw quarterly revenue grow at the slowest rate since 2013, only 6%, to 69,000 million, while costs increased 20% and profits fell more than 25%.
The exception was Apple, which closed the week in positive (5%) and remained, for another week, as the most valuable company in the world. Despite CEO Tim Cook warning of rising materials costs, revenue rose 8% to $90bn, boosted by sales of iPhone phones, which grew 10% to $42bn. Mac computer sales also rose another 25%. With a profit that exceeded 20,000 million, Apple shows that its business is the most robust of all.
