If you’re an investor in tech stocks, this week has been rocky—and that rockiness continued on from the week prior, too. Until yesterday it seemed as if most tech stocks were doomed. A brief recap:
- Snap (SNAP): Last Thursday, the Snapchat maker missed on EPS and revenue, citing poor ad sales and economic headwinds. The stock sank 25%.
- Twitter (TWTR): Last Friday, the social media giant reported an earnings, revenue, and mDAU miss. Twitter’s revenue miss was its biggest ever, reports CNBC.
- Microsoft (MSFT): On Tuesday, the Windows giant missed on earnings and revenue, citing foreign exchange rates, the war in Ukraine, and “a deteriorating PC market in June.”
- Alphabet (GOOG): Also on Tuesday, Google owner Alphabet missed on earnings and revenue, and ad revenue growth slowed with companies scaling back on marketing as inflation bites.
- Meta (META): On Wednesday, Facebook owner Meta posted its first year-over-year quarterly revenue decline, citing weaker ad sales due to inflation and Apple’s iOS privacy changes.
- Intel (INTC): On Thursday, Intel announced its revenue declined 22% year-over-year, sending the stock down over 10%. Intel cited “the sudden and rapid decline in economic activity” as the biggest driver for the disappointing numbers.
That’s a pretty bad week for Big Tech, right? But then yesterday investors breathed a sigh of relief as two of the industry’s biggest players—Apple (AAPL) and Amazon (AMZN)—did something unexpected: They reported relatively great numbers yesterday after the bell.
Apple reported a revenue record for the June quarter of $83 billion, with $19.4 billion of that being pure profit. And the company’s flagship product—the iPhone—saw $40.6 billion in sales, up over $1 billion from the same quarter a year earlier. And, as MacRumors reports, Apple’s all-important services division now has 860 million paid subscribers—up 160 million subscribers in just 12 months.
And Amazon? The company reported stronger-than-expected sales of $121.2 billion in Q2—up 7% year-over-year. Amazon’s stock jumped over 12% in pre-market trading this morning on the news.
So why are Amazon and Apple doing so well compared to other Big Tech companies? It seems pretty simple: Despite inflation and recession worries, Amazon and Apple are offering products that everyday consumers are still willing to buy despite economic headwinds.
Contrast that with Snap, Twitter, Meta, and Alphabet whose “consumers” are mostly businesses (ie: advertisers). Ad spending is one of the first things companies cut when the economy goes south. Even Intel and Microsoft—while they do offer consumer products—get most of their revenue from selling to businesses, who scale back purchases during uncertain times.
As Apple and Amazon show, if you sell products that people want, or see as necessities, you can weather economic downturns better than most of your rivals in Big Tech.
Login to add comment
Other posts in this group
Shares of Deliveroo, the food delivery service based in London, are hitting three-year highs on Monday after it received a $3.6 billion
Social media users have been having a field day with Waymo’s autonomou
If you’re not on TikTok, you may not have heard of Aaron Parnas. But for many young people across the U.S., he’s a prominent political news source, with over 3.5 million followers on TikTok and ju
Getting a sense of the scale of social media platforms can be tricky. While tech companies often share self-serving metrics—like monthly active users or how likely users are to buy products after
Fun fact: The saying “work smarter, not harder” is coming up on its 100th birthday. Coined
If you’ve followed Apple for any length of time, you’ve no doubt come across the notion that the company doesn’t rush into adopting cutting-
