Are tech stock recovering after a lousy 2022?
Meta, Microsoft, Alphabet, and Amazon all announced solid quarterly earnings this week as big tech continues to bounce back from 2022, a year in which the four shed nearly $3 trillion of market cap between them.
Meta has had a tough time since its name-change 18 months ago. However, the social media giant reminded everyone that its apps are still wildly popular, reporting over 3 billion daily active users for the first time across its family of Facebook, Messenger, WhatsApp and Instagram. Also well-received was the return to revenue growth after 3 consecutive quarters of decline. That paves the way for Zuckerberg to continue investing in his biggest bets: AI and the much-maligned metaverse.
Microsoft continues to march on. Revenue grew 7% year-over-year, and its Azure cloud-computing business held up better than expected, growing 27%. Elsewhere, the company’s partnership with OpenAI, the maker of ChatGPT, promises continuing innovations for the entire Microsoft suite. Those developments have contributed to a ~$480bn increase in MSFT's market cap since the beginning of 2023 — equivalent to gaining the value of about 8 Ubers.
Google’s owner Alphabet posted more measured results as the firm continues to play catch-up since the rollout of AI-powered search from Microsoft. The company’s ad revenue fell, although not as sharply as expected, and lower costs helped the bottom line beat expectations.
Amazon nearly delivered a win. The company’s shares initially soared as much as 10% on the back of a better-than-expected quarter… but cautious comments about its all-important cloud division — where growth slowed to 16% from 37% last year — sparked fears for the future.