Tech giants Google, Apple and Amazon will report their latest results on Thursday as shares in Meta skyrocketed after the Facebook owner posted a smaller-than-expected slump in sales for 2022.
The results of the world's biggest tech companies follow several weeks of unprecedented layoff rounds in the usually unassailable sector amid pessimism about the economic outlook.
The souring mood followed a long spell of outsized growth during the peak Covid-19 period when consumers went online for work, shopping and entertainment.
Meta as expected on Wednesday said sales fell last year, the first time that occurred on an annual basis since the company went public in 2012.
The social media giant said sales dropped one percent to $116.6 billion, while it also announced that the number of daily users on Facebook hit two billion for the first time.
But CEO and founder Mark Zuckerberg said he was upbeat about the future, pointing to the success of short videos and better delivery of ads after Apple made targeting users harder on the iPhone.
He also assured investors that Meta would take bolder decisions and run a much nimbler operation, hinting at more layoffs.
Shares in Meta jumped as much as 25% on Thursday, setting the bar high for the earnings announcements by the other tech giants after markets closed later in the day.
Following in Meta’s wake, Google’s parent company is expected to also announce a slump in ad sales, which would be only the second quarterly fall in since the search engine giant went public in 2004.
Google, which has long seen itself as an innovation leader, was caught off guard by the sudden rise of user-friendly AI apps such as ChatGPT, which is seen as a potential rival to Google's all-powerful search engine.
CEO Sundar Pichai last month announced a plan to lay off 12000 people in order to reverse pandemic over-hiring and focus on new areas, especially artificial intelligence.
Apple is the only tech giant that has yet to announce major layoffs in recent weeks and investors will be taking a hard look at how its sales have been affected by China's zero-Covid policy that was only recently lifted.
China remains the key manufacturing hub for iPhones and the drastic restrictions adversely affected Apple’s ability to export the iPhone 14 during the key holiday season.
Apple, the world's biggest company in terms of market value, will also be burdened by a drop in smartphone sales worldwide, its key driver for profits.
According to the International Data Corporation, worldwide smartphone shipments declined 18.3% year-on-year to 300.3 million units in the fourth quarter of 2022.
Amazon is also expected to report a hit to sales after the company announced a round of layoffs to correct for a hiring binge during the pandemic when business growth ramped up.
Last month, the company said it would let go more than 18000 employees after the workforce swelled by 800000 employees during the peak years of the pandemic period.