But this week, as the United States reported that economic output fell for the second straight quarter, Microsoft, Alphabet, Amazon and Apple posted sales and profits that showed their businesses have the dominance and diversity to defy the economic woes hurting smaller companies.
Microsoft and Amazon proved that their lucrative cloud businesses were continuing to expand even as the economy cools. Alphabet’s subsidiary, Google, demonstrated that search advertisements remained in demand among travel companies and retailers. And Apple papered over a downturn in its device business by increasing its sales of apps and subscription services.
Collectively, it was a sign that tech may have already hit a bottom and is beginning to rebound, said Dave Harden, chief investment officer at Summit Global, a firm near Salt Lake City with about $2 billion under investment that counts Apple among its holdings.
“These guys are still delivering,” Harden said. “They’re acting responsibly and navigating through a choppy period.”
The results lifted the companies’ share prices and provided a jolt to the stock market, even as Alphabet and Microsoft fell short of Wall Street’s expectations.
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The results made clear that the companies aren’t immune to problems such as supply chain disruptions, rising costs and shifts in customer spending. But their giant businesses aren’t as vulnerable to the challenges sweeping across the economy as smaller companies like Twitter and Snap, the owner of Snapchat.
During calls with analysts, the companies’ CEOs cautioned investors about the months ahead, using words like “challenges” and “uncertainty.” Concerns about the economy are leading some of them to slow the pace of hiring and take other precautions, but none have said they plan to begin making layoffs.
Meta, the company formerly known as Facebook, was an outlier among the biggest tech companies, reporting its first decline in quarterly revenue since going public a decade ago. Its woes were an outgrowth of rising competition from TikTok, which has sapped it of users and advertisers, and challenges from privacy changes on iPhones implemented by Apple.
This article originally appeared in
The New York Times.
