Last year, there was a huge amount of caution around the US Big Tech stocks, many of which demonstrated considerable levels of volatility on New York’s premier stock exchanges.
There were several periods in which stocks in some of the most well recognized publicly listed technology firms decreased in value tremendously.
That has all gone relatively quiet, especially in the light of the current volatility in the currency markets as the US Dollar remarkably holds its strength over a weak Pound.
Today, however, the US big tech stock debacle has come to light again, with Microsoft and Alphabet (Google) having reported that they have experienced downturns in sales, which adds further weight to the speculation that the Western economy in general is looking at further downturns.
Alphabet (Google) has been cutting its advertising budget, and the resultant 6% rise in sales in the 3 months neding September 30 this year is a damp squib. In fact, this is the slowest quarterly growth since before March 2020 for Alphabet.
Microsoft has also stated that demand for its hardware and software has weakened over the same period, with sales having increased by 11% to $50.1bn, marking its slowest revenue growth in five years.
Costs for US tech giants have been a major stumbling block recently, as the strong US Dollar against depreciating majors in Europe and Japan have resulted in a very high cost of doing business overseas.
Profits at Alphabet dropped nearly 30% to $13.9bn in the quarter, as YouTube (also owned by Alphabet alongside Google) advertising revenues declined for the first time since the firm started to report them publicly.
Interestingly, Microsoft stock has been doing well until this announcement came to light. It is currently at 1.38% over its close yesterday, and up 5.76% over the five day average, however there is a prediction by Google Finance that it may not hold that way.
It’s a similar story for Alphabet (Google) stock which closed 1.9% up over yesterday’s close, with a prediction of some volatility ahead.
Time will tell of course, however these figures are being considered by many news sources as a marker of weak performance and therefore have led to cautiousness in the markets.
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