April 24 (Reuters) – Investors in the U.S. tech giant are scrutinizing whether cost cuts will push profits to a satisfactory level as record job cuts near a quarter. Companies are emphasizing that artificial intelligence will be the next growth driver.
Microsoft (MSFT.O), Google parent Alphabet (GOOGL.O), Instagram owner Meta Platforms (META.O) and Amazon.com (AMZN.O) all report quarterly results this week announced.
Together, they have a market capitalization of over $5 trillion, representing more than 14% of the value of the S&P 500 (.SPX) index.
According to Refinitiv, analysts expect earnings to rise an average of 4.5% from the previous quarter among Microsoft, Alphabet and Meta, driven by an 11.8% increase in Meta’s revenue. Year-over-year, earnings are expected to fall nearly 16% on average, with Microsoft expected to be the worst performer with his 0.5% slip.
The three companies, along with Amazon, said they would cut 70,000 jobs between November and March amid a rapidly weakening economy following a pandemic-driven job boom. announced layoffs.
Amazon.com (AMZN.O) reportedly saw a sharp decline in fourth-quarter earnings after a write-down on its investment in loss-making EV maker Rivian Automotive (RIVN.O) We plan to post the first quarter. Earnings are expected to be eight times his when compared to the previous quarter.
Amazon’s North American sales are expected to beat Wall Street’s expectations in the first quarter, according to research firm YipitData.
Both companies are likely to provide an update on their AI efforts, a trend notable after the chief executive’s mention of the technology on an earnings call last quarter.
“If last quarter’s message from Big Tech was about improving efficiency and bottom line, this quarter’s message is more about the enormous potential of artificial intelligence,” said Andrew Lipsman, an analyst at Insider Intelligence. It is likely to be positive.
Microsoft integrated OpenAI’s ChatGPT technology into its search engine Bing to take on market leader Google.
Google has launched its chatbot Bard.
AWS, Amazon’s cloud division, the world’s largest, has released a suite of technologies aimed at helping other companies develop their own AI-powered chatbots, and Meta has released individual images from within images. We released an AI model that can select objects from
“The pressure to improve cash flow in a slowing economy is also a double-edged sword,” said Itau BBA analyst Thiago Kaprskis.
“There is an expectation that companies will be able to create and do more with AI…all technology investors expect those companies to be at the forefront.”
Amazon, Google, and Microsoft’s cloud businesses were also more stable than expected, according to analysts.
Shares of Microsoft and Alphabet are up 19% so far this year. Apple and Amazon are up 28% and 23% respectively. Metashare rose nearly 77%.
Apple, the world’s largest company, is set to report earnings on May 4, but it’s dealing with slowing demand for iPhones and MacBooks as consumers curb spending.
Reported by Nivedita Balu and Tiyashi Datta from Bangalore. Edited by Sayantani Ghosh and Shounak Dasgupta
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