Apple, Alphabet, Amazon Hurt as Economic Slump Crimps Demand
Technology bellwethers Apple Inc., Amazon.com Inc. and Alphabet Inc. posted results Thursday that show an economic slowdown is throttling demand for everything from electronics and e-commerce to cloud computing and digital advertising.
Apple’s sales fell more than analysts predicted during the holiday quarter, slammed by slack purchases of iPhones and Macs. Amazon’s revenue was trimmed by soft consumer demand for products sold online and slowing growth in a once-booming business that provides remote computing power to companies. Alphabet’s results missed estimates after customers curtailed orders for ads that appear alongside online search results.
“The war in Ukraine, inflationary pressures, economic uncertainty and macroeconomic headwinds kept the consumer sentiment weak in 2022 while smartphone users reduced the frequency of their purchases,” Harmeet Singh Walia, a senior analyst at Counterpoint Research, wrote in a report on Apple.
Economic weakness also affected business demand for ads and cloud computing, said Mandeep Singh, technology lead at Bloomberg Intelligence. The sluggish economy was most evident at Alphabet “as they called out advertisers pulling back, echoing what other ad vendors have said,” he said in an interview. “Cloud consumption is coming down, though growth rates are still higher there.”
Shares of all three companies were down in premarket trading, with Amazon falling 5.4% and Alphabet losing 3.8%. Apple slid 3.2%. That helped pull Nasdaq 100 futures lower, indicating a possible reversal of the Thursday rally led by Meta Platforms Inc., whose results emphasized cost cuts and tens of billions of dollars in share buybacks.