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Investors chopped $566 billion from the collective market value of Alphabet, Amazon, Apple, Meta, and Microsoft last week as interest rates and rising costs foreshadowed slowing growth and weaker performances.
Investors’ fears that tech firms were not watching costs worsened when Alphabet, Google’s parent company, announced it had taken on 13,000 new employees in the third quarter in one of its biggest hiring sprees on record.
In a recent earnings call, CEO Sundar Pichai had pledged to focus on restraining costs, although the company has said it will continue its aggressive capital spending.
Investors erased $174 billion from Microsoft’s market cap when the company reported its cloud computing business was growing more slowly than projected.
Meta’s stock value was slashed by about $80 billion, or roughly 25 percent, on 27 October after it announced costs were rising, quarterly revenue had fallen by 4 percent, and losses in its metaverse venture would be “significantly” greater next year.
The share price lost $31.88, bringing it down to $97.94, a level last visited in 2016.
Meta faces stiffening competition from TikTok and Google’s revamped ad tracking methods.
Amazon posted third-quarter sales 9 percent lower than the same period last year and projected sales of $140 million to $148 million this quarter, jolting analysts who had expected better than $155 million.
The double-barreled bad news dropped Amazon’s share price 12 percent.
Amazon holds 38 percent of the online retail market, according to data service Inside Intelligence, which said that the share is unlikely to be able to continue to grow at past rates.
To cut costs, Amazon has let go of millions of square feet of warehouse space, put off opening new facilities, frozen hiring, and not replaced many workers who quit or retired.
However, it also has promised to spend $1 billion to raise its average starting hourly wage to $19.
Intel reported a 20-percent drop in third-quarter sales revenue as demand weakened for electronics, which consumers binge-bought during the COVID War.
Sales of personal computers, a major share of Intel’s market, dove 15 percent in the third quarter, International Data Corp. reported.
Intel has cut its current-quarter and full-year financial forecasts and has begun cutting $3 billion in costs, including laying off workers and reducing factories’ operating hours, it said.
“It’s just hard to see any points of good news on the horizon,” CEO Pat Gelsinger said in an earnings call.