Big Tech Stocks Trend Sideways After as Financial Results Come To Light

Earnings reports from Big Tech companies Amazon, Meta, Apple, and Microsoft sparked major stock moves late Thursday as investors reacted to the latest financial results. 

Meta Platforms and Amazon saw their market values surge, while Apple declined after mixed results in China. 

The shifts highlighted both opportunities and challenges facing tech giants in areas like artificial intelligence and international markets.

Meta Jumps on Strong Ad Revenue

Meta’s stock skyrocketed over 14% to an all-time high of $451 after markets closed Thursday. The stunning rally added $148 billion to Meta’s market capitalization, elevating it to $1.16 trillion. 

The surge came after Meta reported a 25% increase in quarterly revenue to $40.1 billion, driven by resilient advertising sales and device revenue. 

The company also announced its first-ever stock dividend, appealing to investors seeking mature, dividend-paying stocks. The dividend signals Meta’s evolution beyond its high-growth Facebook roots. But revenue gains showed Meta continues growing strongly as well.

Meta appears to be having its cake and eating it, blending maturity with momentum. Amazon’s shares jumped 8% in extended trading Thursday, boosting its market capitalization to $1.78 trillion.

The e-commerce and cloud computing leader exceeded expectations for quarterly revenue thanks to robust holiday online spending.

Amazon has been a prime beneficiary of consumers’ shifting to digital shopping and preference for online retailers. The latest results confirmed Amazon’s dominance in e-commerce, especially during the critical holiday season.

The company seems poised to continue riding secular shifts to online spending.

Its leading position in cloud computing with AWS provides another engine for growth in 2023 and beyond. In contrast to Meta and Amazon, Apple saw its market value dip by $70 billion to $2.2 trillion after delivering mixed quarterly results Thursday afternoon. 

While Apple’s overall revenue and profits beat analyst estimates, sales, specifically in China, fell short. That stoked worries that Apple is losing ground in the competitive Chinese smartphone market.

Investors are also concerned Apple may be falling behind in artificial intelligence, as companies like Microsoft and Google plow money into AI development. 

However, Apple teased new “exciting” AI products later this year.

Tech Giant Microsoft Leads The AI Race 

Looking ahead, analysts see Microsoft as having the early lead over Apple in AI, thanks to swift investments in artificial intelligence AI research from the Windows maker. 

Microsoft displaced Apple as the world’s largest company by market capitalization in January, reflecting this perceived edge in AI and strength in cloud computing.

Given Microsoft’s head start in generative AI, analysts believe its advantage over Apple will likely widen over the next five years. For Apple to bridge the gap, it may need hugely successful AI products or a transformation of the iPhone.