NEWSLETTER
“It doesn’t take a lot of good news for stocks to outperform,” Mahaney said.
But shares of several of those companies fell in after-hours trading on Thursday night after reporting disappointing results for the most recent quarter, making it clear that business challenges for the technology remain.
On Thursday, Google reported its second drop in advertising in its history. Amazon said its lucrative cloud computing business had slowed and sales at its core e-commerce business had fallen.. And Apple posted its biggest decline in iPhone sales for the holiday season since 2018.
Earlier in the day, Meta reported that its sales in the final three months of last year had fallen 4 percent. Last week, Microsoft said spending on cloud computing was weakening.
Market reaction to lackluster tech gains could be an indication of what’s to come for the broader economy. Economists are trying to gauge whether the economy can avoid a deep recession and achieve what some call a soft landing. If technology, like the most prominent industry that weakened last year, bottoms out and starts to recover, it would be an illustration of the relative strength of the broader economy, said Jason Furman, an economist at Harvard.
“Six months ago, the economy was contracting and interest rates were going up, and there was a rebalancing away from the pandemic,” Furman said. “That perfect storm,” he added, “is no longer true.”
Alphabet, Amazon and Apple on Thursday reported quarterly results that largely missed Wall Street expectations. Alphabet posted its fourth straight drop in profit as it grappled with a slowdown in digital advertising. Ad sales on YouTube, Google’s video platform, fell nearly 8 percent to $7.96 billion, below the $8.2 billion expected by analysts.
As Google’s sales decline, Pichai said, the company is making various efforts to rein in spending. They include improving the financial performance of its phones and other devices, trying to make its cloud division profitable, and strengthening YouTube’s business.
