The internet giant reported a decline in profits. Meta, a social media company, said that advertising sales have been cooling off. Microsoft, the most reliable performer in the tech industry, predicted a slow down through the end of the year.
Tech companies have led the way for the US economy over the past decade. Even the biggest companies in Silicon Valley are signaling that tough days are ahead.
The same problems are faced by the companies. They invested in order to keep up with demand. They are adjusting as that spending is slowing. It has been difficult.
At the beginning of the year, Amazon had 788,000 employees and was reining in expansion of its warehousing operations, as well as pulling out of lease agreements. At the end of March, the company employed 1.52 million people.
The problems of the tech industry's leaders are what most companies want. In the most recent quarter, the two companies made over 30 billion dollars in profits. Apple is expected to say that it made more than $20 billion in profits in the last quarter, which will be seen as a disappointment.
A weakness is being exposed by their sudden slow down. Tech companies haven't found a very profitable idea in a long time. Most of the investment in new businesses has gone to ad sales. 15 years after the introduction of the iPhone, Apple still makes money.
How much is inflation? Your dollar won't go as far tomorrow as it did today due to inflation. The change in prices for everyday goods and services is known as the annual change in prices.
Is there a cause for inflation? It could be due to increased consumer demand. There are developments that have little to do with economic conditions and can cause inflation to rise and fall.
I wonder if inflation is bad. It is dependent on the situation. Moderate price gains can lead to higher wages.
Inflation can affect the stock market. It's difficult for stocks to be affected by rapid inflation. Houses have held their value better than financial assets during inflation booms.
Some of them are vulnerable to the upstarts that they used to be. The much younger TikTok is upending popular social media platforms such as YouTube and Meta. In the most recent quarter, Meta's profit was down from a year ago.
The slowdown has been more severe for companies in the gig economy than for those in the more traditional chip industry. A number of start-ups have been negatively affected by the plunge in the value of the digital currency. As investors lose their patience with unprofitable businesses, the ride-sharing pioneer has slashed spending
Semiconductor companies are cutting spending because of the slow sales of PCs. Texas Instruments told financial analysts on Tuesday that it is spreading to sales for things like heating controls and factoryrobots. The threat of trade and technology restrictions have made things worse.
Thill is a technology analyst with the investment firm. No one is immune.
This week, investors were reassured by the promise of slowing hiring and monitoring rising energy and supply chain costs. As the economy struggles, Apple plans to be more deliberate about how it expands.
Other companies are going in a different direction. A lower-priced service that is subsidized by ads is expected to be released next month.
Meta hopes that the construction of a metaverse will be its next big thing. The company is spending a lot of money. The Reality Labs division, which is responsible for the virtual reality and augmented reality efforts that are central to the metaverse, has lost more money than a year ago.
Meta's chief executive said on a call with financial analysts that he gets that a lot of people might disagree with the investment. I think it would be a mistake for us to not focus on any of these areas, which I think are going to be fundamental to the future.
Tech companies ballooned as businesses sent workers home. The industry's strengths were reflected in the aftermath of Covid-19.
Students and employees spent their time on computers and phones. Businesses bought cloud storage and video conferencing software to support remote work. Small businesses were forced to put money into digital ads in order to get customers because people were stuck at home.
Tech companies can't keep up with growth. Sales of computers and phones are not growing as fast as they used to. Businesses struggling with the slowing economy are scrutinizing cloud computing spending. Shoppers have returned to stores and are spending their money on travel, concerts, and sporting events, rather than in person.
The 7 percent rise in sales for the fiscal year that ended in September is less than the 40 percent increase it posted a year ago. Wall Street analysts predict that sales will decline next year as customers in its two biggest markets, the US and China, struggle with economic downturns.
As well as dragging down Microsoft, a similar turnabout in computer sales threatens to compound Apple's troubles. The market for computers is getting worse. Microsoft expects a 30 percent decline in Windows sales over the final months of the year because of the decline in Apple's Macintosh business.
Mikako Kitagawa, a technology analyst withGartner, said there was no demand for PCs in the last two years. Businesses don't need new computers because hiring is frozen.
Microsoft has been able to shake off sluggish computer sales by relying on its cloud computing product. Cloud customers are looking to reduce spending and that has begun to affect that business.
Microsoft said on Tuesday that sales of its cloud computing service increased by 35 percent. Amazon is expected to say that growth of its cloud computing business has slowed when it reports earnings on Thursday.
There was a downturn in online advertising sales. The cracks in that business began to form when Apple introduced privacy changes that made it harder for them to target their digital advertising. Meta warned on Wednesday that there wouldn't be any relief to the ad market.
Steve Milunovich is a long time Wall Street analyst who now works for technology companies. It's time for the reset.
Reporting was done by Don Clark.
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