There were ups and downs for big tech in the week with several of them reporting quarterly results. After some disappointments, the stock exchange week got more positive when both Apple and Amazon showed better results than expected.
Tech companies have had a turbulent year with Nasdaq 100 index down approximately 25% since the start of 2022 explained by inflation, increased interest rates, the war in Ukraine and complicating advertising markets.
Meta, owner of Facebook, Instagram and WhatsApp, for the first time ever reported a quarterly decline. Year-on-year revenue was down 1% to USD 28.8 billion. Competition from popular TikTok and others meant lower advertising revenue than expected. The company warned that advertising sales are likely to fall again in coming months as e-commerce spending drops after the boom during the pandemic and increasing inflation.
US Federal Trade Commission also announced it would sue to block Meta’s acquisition of the virtual reality fitness company Within Unlimited, which owns the app Supernatural. FTC referred to monopoly concerns.
Google´s owner Alphabet reported Q2 revenue up 13% and Microsoft posted 12% growth year-on-year, both companies´ slowest rates in two years.
The previous week closed with disappointing reports from Twitter and Snap. Twitter reported fall of quarterly revenue and a net loss referring to both Elon Musk’s backtracking on his USD 44 billion acquisition and weaker digital advertising markets.
The Twitter Q2 report came the day after Snap’s 25% share price drop when the company said its loss had grown to USD 422 million, up 178%. Snap said “forward-looking visibility remains incredibly challenging”.
Twitter has sued Musk for backing off his offer to buy the company. Twitter has noted a slight victory as the court has scheduled the case for October while Musk wanted to wait until next year.