Big Tech: quarterly results, economic outlook, and stock market performance
Article analysing latest quarterly results of the big American technology companies and their negative stock market evolution last week, reflecting worse than expected results and future forecast compared to the golden age reached during the pandemic.
- Big Tech have also been affected by the current economic situation:
- Higher operating costs due to wage pressure and rising energy prices. The price of an engineer´s kilogram has risen, especially in the USA.
- Lower revenue prospects: Compared to the era of mandatory lockdowns and pandemic mobility restrictions, when computer and mobile phone manufacturers absorbed all the microprocessor production previously purchased by automobile manufacturers, consumption of non-essential goods is now expected to moderate and competition from Asian companies is expected to increase.
- Lower appealing from virtual world: During the pandemic, the virtual world and other digital solutions were highly appealing to deal with lockdowns and experienced strong growth, however, next Christmas will be the first Christmas without mobility restrictions in most developed countries since 2019, which according to the article will mean that customers will continue to consume more tangible services. In addition, projects such as AI and metaverse will continue to require heavy investment in an environment where revenues from these new business areas are increasingly uncertain.