Alphabet’s earnings sailed past Wall Street estimates after the markets closed on Tuesday. Meta followed suit on Wednesday, solidly topping expectations.
It didn’t matter.
Following better-than-expected results on the top and bottom lines from two of the most valuable tech companies in the world, the Nasdaq responded by dropping roughly 3% over two days.
With Amazon’s third-quarter report on deck after Thursday’s close and Apple set to announce next week, tech investors are showing less interest in what’s happened over the past three months and are more concerned about what may be coming as the year wraps up.
In Alphabet’s earnings report, Wall Street fretted over the numbers out of the Google Cloud division, which is investing heavily to try and catch Amazon and Microsoft, particularly when it comes to managing hefty artificial intelligence workloads. The cloud group reported $8.41 billion in quarterly revenue, missing analysts’ estimates of $8.64 billion, according to LSEG, formerly known as Refinitiv.
Ruth Porat, Alphabet’s finance chief, told analysts that the numbers reflect “the impact of customer optimization efforts,” a phrase that generally refers to clients reeling in their spending.
The concern from Facebook parent Meta was sparked by comments that CFO Susan Li provided on the earnings call regarding the advertising market in the fourth quarter. Due to the escalating conflict in the Middle East and uncertainty about how it will affect ad spending, Meta provided a wider revenue guidance range than normal, Li said.
“We have observed softer ads in the beginning of the fourth quarter, correlating with the start of the conflict, which is captured in our Q4 revenue outlook,” Li said on the call. “It’s hard for us to attribute demand softness directly to any specific geopolitical event.”
Alphabet shares are down by about 12% over the past two days, while Meta has dropped roughly 7%. Amazon’s stock has dropped more than 6% over that stretch, heading into its report…
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