Big Tech Is Proving Resilient as the Economy Cools

In what many investors interpreted as a testament to the industry’s optimism, Microsoft said it expected double-digit revenue growth for the next year, and Amazon said it expected sales to increase at least 13 percent in the current quarter.

Satya Nadella, the chief executive officer at Microsoft, said the company would invest over the year to take share and build its businesses, while Brian Olsavsky, Amazon’s finance chief, said it would have more product in stock and speedier deliveries.

“That’s not a recession forecast,” said Sean Stannard-Stockton, president of Ensemble Capital, a San Francisco-based investment firm with $1.3 billion under management. “If we do avoid a severe recession, it’s clear that a lot of these businesses will see growth rate pick back up.”

Though Apple and Alphabet didn’t provide guidance, the companies bought back tens of billions of dollars in stock during the period. Apple’s purchase of $21.7 billion and Alphabet’s purchase of $15.2 billion testified to the companies’ belief that their businesses will continue to grow in the years ahead.

Meta, the company formerly known as Facebook, was an outlier among the biggest tech companies, reporting its first decline in quarterly revenue since going public a decade ago. Its woes were an outgrowth of rising competition from TikTok, which has sapped it of users and advertisers, and challenges from privacy changes on iPhones implemented by Apple.

Article source: https://www.nytimes.com/2022/07/28/business/big-tech-resilient-economy.html