By John Hugh DeMastri for Daily Caller News Foundation
Big Tech stocks dropped this week as firms across the industry posted a series of weak earnings reports, with social media giant Meta set to post a significant slowdown after markets close Wednesday.
This year, Meta, Netflix, Amazon, Microsoft, Alphabet and Apple have lost $2.5 trillion in market value combined, Reuters reportedWednesday. Meta is expected to post a 5% decline in revenue compared to last year due to reduced ad traffic as users struggle with inflation and spend more time with rival TikTok, accordingto The Wall Street Journal.
Ad revenue has been a particular point of contention for companies like Google-parent Alphabet, which saw revenue for its video streaming platform YouTube fall for the first time since it began reporting the value in 2020, accordingto The WSJ. Overall, Alphabet saw a 26.5% annual decline in net income to $13.9 billion in the third quarter, despite consistent revenue growth in its cloud-computing division, which saw an annual gain of 37.6% to $6.9 billion.
“Investors will be bracing for Meta’s results with some trepidation, with a common thought being that if Google’s struggling, the rest of the tech pack faces a marathon climb,” Sophie Lund-Yates, an analyst at British financial services firm Hargreaves Lansdown, told Reuters.
Ad-dependent companies like Alphabet are not facing the pressure alone, according to Reuters. Microsoft saw revenue increase by 11% to $50.1 billion in quarter three, but net income fell 14% to $17.6 billion, its worst net income decline in two years and worst revenue growth in more than five, the WSJ reported.
Even as audio streaming giant Spotify posted revenue and subscriber counts above expectations, shares fell nearly 6% after markets closed Tuesday, and were down more than 8% at time of writing, the WSJ reportedWednesday. Increased licensing costs prompted the company to announce plans to raise the cost of its premium subscription service in 2023, from the $9.99 price point it has held since it launched in 2011.
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