Tech giants make big revenue waves: Meta and Amazon reach new highs while Apple faces setback
Meta's market capitalisation skyrocketed to $1.16 trillion
Meta Platforms and Amazon made huge stock gains after announcing their quarterly results while Apple stumbled, reflecting shifting investor sentiments and competitive dynamics in the tech industry.
Meta, formerly known as Facebook, stole the spotlight with a surge of over 14%, propelling its stock to a record high of $451.
The company's market capitalisation was up by $148 billion to reach $1.16 trillion after announcing its inaugural dividend payout.
The unprecedented move into dividend payments, coupled with a 25% surge in revenue to $40.1 billion for the December quarter, fuelled investor enthusiasm.
Meta's resurgence over the past year has been fuelled by renewed investor optimism about AI and the company's efforts to enhance user growth and digital ad sales.
Meta's Reality Labs unit, focused on metaverse technologies and augmented reality, exceeded revenue expectations with record sales of $1.1 billion.
The company has also revealed plans to ramp up its capital expenditures, earmarking between $30 billion and $37 billion for investments in servers, with a focus on bolstering its AI capabilities.
Amazon surges
Amazon, the e-commerce behemoth, witnessed an 8% surge in its stock price on Thursday following a beat on December-quarter revenue expectations.
The increase reflected strong growth in online spending during the holiday shopping season, pushing Amazon's market capitalisation to $1.78 trillion.
Despite that, Amazon faces stiff competition in the cloud services arena, particularly from rival Microsoft, which has been challenging Amazon's dominance.
AWS CEO Andy Jassy emphasised the unit's focus on customer-centric innovation, highlighting efforts to incorporate generative AI into its services.
While generative AI revenue remains relatively small, Jassy anticipates it will drive significant revenue growth over the coming years.
For the December quarter, AWS posted revenue of $24.2 billion, in line with analysts' expectations.
To further bolster its cloud business and respond to Microsoft's investments in AI, Amazon announced an investment of up to $4 billion in chatbot-maker Anthropic.
Looking ahead, investors anticipate further growth in Amazon's ad revenue, driven by the expansion of its advertising services segment and the Prime Video ads business. However, not all of Amazon's endeavours have been successful, as European regulators dashed its plan to acquire iRobot for $1.4 billion.
Apple stumbles
Despite shareholder euphoria around Meta and Amazon, iPhone maker Apple found itself on shaky ground.
The company reported quarterly results that surpassed analysts' expectations in terms of profit and revenue, fuelled by the growth of its iPhone segment, but the spotlight fell on disappointing sales figures in China, sending its shares down 3.3% on Thursday.
Sales in China reached $20.82 billion, short of analyst estimates of $23.53 billion, according to data from LSEG.
Counterpoint Research reported a decline in China iPhone unit shipments during the quarter, further highlighting the challenges Apple faces in the region.
Despite the setback in China, Apple's overall performance exceeded expectations, with sales of iPhones reaching $69.70 billion, growing by 6% and surpassing analyst forecasts.
The company's services business also saw significant growth, rising 11% to $23.12 billion in sales, albeit slightly below analyst expectations.
Apple's wearables segment, which includes AirPods and Apple Watch sales, experienced a decline to $11.95 billion, as weak demand persisted despite warnings from company executives.
Apple's CEO, Tim Cook, sought to reassure investors on an earnings call, mentioning upcoming developments in generative AI that the company is "incredibly excited about."