Apple Revenue Decline Dismays Market; Meta Springs Surprise
Apple reported a rare revenue decline for the quarter and a steeper drop than Wall Street analysts had expected after facing a shutdown at a key Chinese factory late last year, Allison Morrow reported for CNN.
Photo Insert: Apple’s poor quarter proves that even the most valuable US-traded company isn't immune to the challenges facing the tech industry at large.
Investing.com senior analyst Jesse Cohen said. "Apple’s poor quarter proves that even the most valuable US traded company isn't immune to the challenges facing the tech industry at large."
Google's parent, Alphabet, saw a steep decline in profits as its ad sales machine came under pressure from heightened competition and advertisers tightening spending. Alphabet "underperformed our expectations across almost all business units," Cohen said.
Amazon actually reported solid revenue for the final three months of last year — a 9% increase from the prior year, which beat Wall Street’s expectations. But the company indicated sales for the current quarter could be lighter than analysts expected. Shares fell nearly 4% after the market closed.
By reporting earnings a day before its rivals, Meta managed to set the tone for Big Tech. And it's hard to overstate just how amped Wall Street was that Meta's results beat expectations.
On Wednesday, Meta didn't report a slam-dunk quarter, per se. But the fact that its ad business fell only 4% from the year-earlier period triggered some relief about the state of the digital advertising industry.
Plus, CEO Mark Zuckerberg touted his plan to focus on "efficiency" going forward. Oh, and the company is also going to boost its share buyback budget by a cool $40 billion — investors like that a lot. Revenue was flat, but not down, and that's what passes for good news these days.
All of that helped send shares of Meta up 23% Thursday — its biggest gain in nearly a decade.
Just to underscore how big of a deal that stock movement is: When Meta goes up 23% that is equal to about $100 billion in market value. That is more than the vast majority of state budgets. It's equal to roughly the entire market cap of Citi, America's third largest bank by assets. In a single day, Morrow reported.