In the second week of November, when Meta CEO Mark Zuckerberg let go of 11,000 employees in order to make ends meet, he wrote that, in bumping up expenditures during pandemic times, when big tech experienced a boom, “I got this wrong, and I take responsibility for that”. A similar apology came out from Twitter founder Jack Dorsey after one half of company staff were recently terminated: “I grew the company too quickly”, he tweeted.

The need to lay off staff was not a surprise. In the last week of October, after handing in their quarterly results, Microsoft and Alphabet found their combined market value had slipped by $280 billion when traders sold off their stock en masse. Meta Platforms posted their second straight quarter of dwindling revenue, and the result was a jaw-dropping 25% loss in value. Amazon said holiday season growth would be much less than hoped and found itself slimmer overall by 12%. 

Big Tech’s earning reports proved that “inflation is catching up with consumer spending and... rate hikes are whipsawing the economy”, explained Michael O’Rourke of Jonestrading. Looking back on a brutal year, Alphabet, Amazon, and Microsoft had watched their shares depreciate by more than 30%, compared with the relatively mild losses of the S&P 500 at 18%. Apple, who posted losses of only 12%, was clearly the exception. Indeed, Big Tech’s injuries had actually lightened their sway over the benchmark S&P 500 index, and those involved in CFD online trading were starting to wonder when and if a recovery might be expected.

Meta Platforms

According to Bloomberg, social media platforms Facebook and Instagram will generate almost all of the $116 billion of Meta’s revenue this year. Indeed, these two make up the world’s “premier social advertising platform”, in the words of John Blackledge of Cowen and Co. The company’s other segment, called Reality Labs, which is focused on developing the metaverse, is more the subject of shareholder hostility. For instance, Altimeter Capital Management has entreated the company to halve its “supersized and terrifying” budget for the project. Zuckerberg is less bothered by the small sums in revenue brought in by Reality Labs because “The future doesn’t just happen”. 

By mid-November, company stock was down a giant 70% for the year and many people pointed their fingers at this expensive venture, rather than at over-expansion during the pandemic, as the CEO had done. Traders view Reality Labs as the “enemy within the walls” according to Monness, Crespi, Hardt & Co. Still, Meta has made some progress with the project, partnering with Microsoft and Accenture Plc to figure out how its new technology can be applied in business. There are also plans afoot to incorporate it into social media apps.

Amazon

Along the lines of Meta, Amazon hired huge numbers of staff during Covid, only to find that demand for its e-commerce services cooled down when the vaccines came out. As October rolled into November, they saw their shares sink by 13% within a few days after their revenue forecast came out. CEO Andy Jassy had put a stop to corporate hiring in October in order to trim expenses. On the positive side, advertising revenue for Q3 was $9.55 billion, beating the figure at the same time last year by 25%.  

In the second week of November, shares took off by 12% when people heard Jassy was focused on cost skimping, but also because of signs the Fed may soon loosen monetary policy since inflation was looking better. “We’re of course taking into account the current macro-environment and considering opportunities to optimize costs”, said the CEO. On November 10th, shares went up to $96.63, enjoying their biggest one-day gain since February 4th. 

Apple

Apple’s revenue for the quarter was better than anticipated due to sales of the newly-released Apple Watch and Macintosh computers, but they admitted Q4 wouldn’t be as strong. Due to their relatively good performance, though, Apple online trading stock surged 7.6% on their results, enriching the company’s market value by $150 billion. The Nasdaq 100 and S&P 500 had Apple to thank for supporting them while the rest of Big Tech were in the doldrums.

The Terrain Ahead

After the Tech selloff at the end of October, and online trading shares of Alphabet, Microsoft, and Amazon made for more of a bargain than beforehand, Wall Street still shunned them. “Earnings estimates for tech look too high given elevated US inflation, declining corporate confidence and a tightening of financial conditions”, explained Mark Haefele of UBS Global Wealth Management. 

Readers who’re interested in CFD online trading with Big Tech shares aren’t particularly depressed by news of sliding shares because they trade in price movements, whether they be up or down. One big theme to keep up to date with on this score is the Fed’s trajectory in giving up its hawkish path, which may either be slower and more drawn out, or brisker, depending on certain factors. Therefore, watch out for key fundamental info, such as inflation reports and Fed announcements, before online trading shares of Big Tech companies as CFDs.