Fact: This is how the tech giants fared on the stock market last year (and this is how it has gone this year)
Meta Platforms: Down 64 percent (up 51 percent)
Netflix: Minus 51 percent (plus 24 percent)
Alphabet: Minus 39 percent (plus 21 percent)
Amazon: Minus 50 percent (plus 32 percent)
Apple: Minus 27 percent (plus 21 percent)
Nasdaq composite index: Minus 33 percent (plus 16 percent)
Rates in parentheses refer to how things have gone so far this year.
Source: Avanza, Nasdaq.
Thursday’s reports from Apple, Amazon and Google’s parent company Alphabet showed that the climate is still tough for the big tech companies.
Lots of Swedish savers have exposure to them, sometimes without knowing it, in the form of global funds or through the premium pension’s couchligger fund for those who have not made an active choice.
Loses in its most important areas
Now all three giants are losing in their core businesses: Amazon’s important online sales are falling, Google’s advertising business is doing worse and Apple sold fewer phones and computers in the final months of last year.
“It is difficult to find any bright spot in Apple’s report, other than that it could have been even worse,” the American tech site The Information summarizes the iPhone vendor’s figures in a newsletter.
Because despite their size, the tech giants cannot rule the economy. It becomes clear that consumers are keeping their old phones a little longer and that companies are cutting back on marketing budgets.
Despite worse than expected results, Nicklas Andersson, savings economist at Avanza, describes the situation for the companies as more stable now.
— It’s not as panicky anymore. Now the reports are coming in a little worse than expected, but in the first quarter of last year there were such large movements in the shares after the reports that people were about to fall off their chairs. It is a massive difference compared to now, he says.
The stock market wants to see savings
Since the turn of the year, instead, the technology-heavy Nasdaq in New York has increased by 16 percent.
After the reports, it is also clear that efficiencies are a buzzword. Before the reports, cuts of around 52,000 employees had been communicated. There is a lot to take from, Alphabet alone has 190,000 employees.
Sundar Pichai, CEO of Alphabet. Archive image.
— Savings is what the stock market wants to see now. It is of course sad when people lose their jobs, but the labor market in the US is so strong that these people are absorbed quickly by other employers, says Nicklas Andersson.
Johan Nilke, technology manager at Lannebo Fonder, thinks that the common thread in Apple’s, Amazon’s and Alphabet’s reports is weaker demand.
— For the coming quarter, the companies are therefore more cautious in their forecasts. It is not so strange because there is uncertainty in the economy in general, he says.
Rather talking about AI
Another common thread is that all tech CEOs now want to talk about AI much more than bad sales.
— Metaverse is completely out. Alphabet wants to meet the threat from Microsoft and ChatGPT, and CEO Sundar Pichai spent a lot of time talking about how far it has come in that area. There was a lot of focus on AI, says Johan Nilke.
Microsoft recently announced that it is investing $10 billion in Open AI, the company behind ChatGPT. There are now plans to incorporate the service into the Bing search engine.
— Today, Bing has almost nothing on the market. But with ChatGPT you could get a worthy competitor to Google, says Johan Nilke.
Even Microsoft’s report a little over a week ago was lackluster. But the share has nevertheless risen 10 percent since then, according to Nilke.
TT: Why are tech stocks generally rising now?
— It’s a shift. The market’s concern that there will be a severe recession globally has decreased. Inflation also appears to have reached its peak in many places, which is interpreted as the central banks’ measures having worked, says Johan Nilke.