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1 min read
May 1, 2023
by
Regan Pearson

Big tech earnings were a snack. What’s next? 🍟

Who’s FAANGING now? Big Tech may have prepared for an economic slowdown and volatility by slimming down staff, but earnings results were still full of small surprises. Seems slight growth in revenue won against growing global competition for eyeballs. But they’re still battening down the hatches ready to weather any storms ahead.
1 min read
May 1, 2023
by
Regan Pearson

Big tech earnings were a snack. What’s next? 🍟

Who’s FAANGING now? Big Tech may have prepared for an economic slowdown and volatility by slimming down staff, but earnings results were still full of small surprises. Seems slight growth in revenue won against growing global competition for eyeballs. But they’re still battening down the hatches ready to weather any storms ahead.
1 min read
May 1, 2023
by
Regan Pearson

Big tech earnings were a snack. What’s next? 🍟

Who’s FAANGING now? Big Tech may have prepared for an economic slowdown and volatility by slimming down staff, but earnings results were still full of small surprises. Seems slight growth in revenue won against growing global competition for eyeballs. But they’re still battening down the hatches ready to weather any storms ahead.
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Trying to fill our secret snack cupboards is getting harder as inflation bites (although we’re all aboard L&P gummies). But employees at Alphabet’s Google (GOOGL, GOOG) are also about to find it harder to get their snack fix. Despite having 12,000 fewer mouths to feed, in an effort to cut costs, Google is slimming down the snacks, including the dried mango and fun-sized M&Ms. 🥭

Big Tech companies moved early to slash costs ahead of a potential economic downturn. But to the surprise of many investors the cupboards haven't gone bare just yet. Last week Alphabet and Microsoft (MSFT) announced snack-sized revenue growth of 3% and of 7% respectively year-on-year for the first quarter. Meanwhile Meta (META) said Chinese retailers helped their revenue in the first quarter of 2023 grow a tasty 3%, reversing declines in revenue endured in 2022. That hit the sweet spot for investors, who sent the company’s share price spiking almost 20%. 🍬

The better-than-expected tech earnings has been a bitter pill for those betting against the companies’ share prices, however. According to the Financial Times, hedge funds have lost US$18 billion this year betting that share prices of Big Tech would continue their downward slide. 💸

So what’s next for Big Tech and FAANG stocks? While downsizing snacks and costs, and upsizing investment in AI has been a theme across the behemoth tech companies, another big theme was ‘uncertainty’. Alphabet noted on their earnings call that ‘the outlook remains uncertain’ as they face a double whammy of slowing ad revenue and gnawing competition from TikTok on their YouTube business. While Meta called out ‘a volatile macro environment’ for the year ahead. 🥠

One of the saltiest outlooks came from Netflix (NFLX), however, which lowered expectations for earnings for the quarter ahead, and declined to offer guidance on subscriber numbers. Let’s hope their snack cupboard is filled with more than just recession lentils. 🍿

Regan Pearson
Finance writer
Linkedin

We’re not financial advisors and Hatch news is for your information only. However dazzling our writing, none of it is a recommendation to invest in any of the companies or funds mentioned. If you want support before making any investment decisions, consider seeking financial advice from a licensed provider. We’ve done our best to ensure all information is current when we pushed ‘publish’ on this article. And of course, with investing, your money isn’t guaranteed to grow and there’s always a risk you might lose money.

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