E-commerce colossus Amazon on Thursday reported that its sales in the recently ended quarter grew more than expected despite inflation and other economic turmoil.
Amazon sales topped $121 billion in the quarter, but the company logged a loss of $2 billion dollars as it continued to work to rein in costs—but its shares still jumped 10 percent in after-hours trading.
A crowded period of earnings from the world’s biggest tech firms has mostly disappointed, but investors have seemed relieved the news was not worse.
Recession fears, a strong dollar, shrinking advertising budgets and inflation—tech companies’ pandemic-era booms have now tipped into a downturn.
Microsoft and Facebook-owner Meta both cited the harm to their business from a strong dollar, with the social media giant pointing to the greenback’s role in the firm’s first year-on-year revenue decline since going public in 2012.
In addition to the generally bumpy economic times, firms such as Netflix and Meta are fighting fierce competition from rivals—and both reported losing some ground.
Meta lost about two million monthly users between quarters, and Netflix shed nearly a million paying customers, which was less than expected.
Yet Netflix stock is up about a percent in the past five days, with investors potentially hopeful after the firm projected a coming rebound in subscribers.
Markets seemed similarly assuaged despite Google parent Alphabet missing on revenue and profit.
The Silicon Valley giant’s bad news was not unexpected, as the flow of online ad dollars that fuels the company’s fortunes has slowed as inflation, war and other troubles vex the overall economy.
“Still, with its tremendous market share in search advertising, Google is relatively well positioned to weather the rough waters that lie ahead,” said analyst Evelyn Mitchell.
As advertisers have tightened their belts, and Apple’s privacy changes have bitten into firms’ sales of costly but highly targeted ads, the damage was uneven.
Meta’s income has taken a beating, and with a share price that has lost about half its value since February, it’s clear that investors are still wary about the company’s future.
Analysts noted Meta’s reported 14 percent drop in average price per ad was a steep change coming on top of the first quarter, when ad prices dipped 8 percent.
“The good news, if we can call it that, is that its competitors in digital advertising are also experiencing a slowdown,” said analyst Debra Aho Williamson.
Snapchat’s parent firm, for example, reported that its loss in the recently ended quarter nearly tripled to $422 million despite revenue increasing 13 percent under conditions “more challenging” than expected.
“We are not satisfied with the results we are delivering, regardless of the current headwinds,” California-based Snap said in a letter to investors last week.