Big Tech earnings reports have been a major topic of discussion for analysts, with many finding the slowdown in growth a cause for concern.
Recent reports claim that tech giants like Netflix, Meta, Amazon, Microsoft, Alphabet, and Apple have lost a combined market value of $2.5 trillion so far. Such claims are widely believed to discredit the narrative that big tech companies are invincible in evolving macroeconomic conditions. In the aftermath of the pandemic, several tech companies attribute high interest rates for their weak revenues. While the majority assumed that it wouldn’t be the same for big techs, the reality turned out to be quite different.
Meta’s Q3 earnings call reported a decrease of 4% compared to the Q3 earnings last year. The decline in revenue, Meta said, is driven largely by their significant expenditure toward the metaverse project. While the expenses towards Reality Labs, Meta’s virtual reality division, reportedly increased by 24%, the revenue decreased by 49%—leading to a total operating loss of $ 3.7 billion in this division alone. Meta has also stated that all of the capital expenditure growth in 2023 is directed at the efforts to increase its AI capacity.