Tech’s Terrible Week, in 10 Charts

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It was indeed a horrible, horrible, no good, worst week for technology. From semiconductors and social media to computing and the cloud, the world’s biggest companies are reporting on the number of challenges they are facing. A flood of unrighteous mobs came, took hostages and sold them.

Most of the biggest tech names tried to regain some ground on Friday, which was driven by Apple’s relatively healthy performance. But overall he remained glum.

A few hundred different data points have been shared with the market. Taken together, they tell of a strengthening of the greenback industry’s blow, supply shortages extending into a third year, inflation still under control and economic growth figures that look increasingly dismal. We’ve distilled all of this into 10 papers – see what we’ve left out to tell us.

The slump in the semiconductor industry can best be summed up by the unfolding disaster at Intel Corp, the largest US chipmaker. As a supplier of components for computers and servers, Intel has been hit by a slowdown problem and is desperately trying to adapt even as it takes bets on rivals Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Corp. But the price will not come down. at the time of the fourth-fourth number of the help.

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A year ago it was a world of short chips and supplies were rushing to buy equipment and crank output. Last month, they collectively cut the 2022 budget by more than $16 billion and plan to reduce spending next year.

The most common theme in the results this season has been the impact of the rise of the US dollar against almost every sector. Few companies are immune, including Amazon.com Inc. to be among the heavy hitters.

Apple Inc. it looks relatively strong compared to everything else. His iPhone has done pretty well, though it’s a touch below estimates and has taken off for a few more days of availability. Services, a division that includes Apple Music and Apple+TV, which is the second-largest contributor to the company’s revenue, continues to see solid growth, albeit at a slower pace than before.

Meta Platforms Inc. He is struck from all sides. The owner of Facebook, Instagram and Whatsapp was seriously affected by changes to Apple’s privacy rules, which made it difficult to track users through apps and thus push advertising rates. The global trend of higher growth just adds to the miseries. Although the user numbers are gradually increasing — it has 3.7 billion active users across its family of apps — the average revenue per person is declining.

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Meanwhile, the social media company is burning cash in its Reality Labs division — founder Mark Zuckerberg’s venture into virtual reality and the metaverse, which inspired a name change last year. That business has lost more than $20 billion a day, and Zuckerberg has told investors to expect it to stay short for a while.

Alphabet Inc. he is not doing well, but at least he is growing. A 6.1% increase in third-quarter revenue was the slowest since June 2020 after the Covid-19 pandemic hit. Its Google search-based advertising divisions are expected to complement its affiliate network business and YouTube video service, while cloud services remain solid.

Over at Microsoft Corp., a decade’s transition away from client computing — where revenue was tied directly to sales of computers and hardware — is helping it weather it better than most. Returns for the September period were up just 11%, the slowest in five years, but still far better than most technical peers. Its cloud and productivity offerings are major reasons for this relative strength. Customers — both consumers and corporates — are somewhat tied to the election of service providers, with those who have signed up for their blue cloud in a state they can’t run away from when times are tough.

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The last two charts show just how badly investors reacted to all this news. The stock market for trucks is a global, cross-industry phenomenon. However, the technology sector fared much worse, with the Nasdaq down 30% from a year ago.

Those companies with a heavy reliance on advertising or short-term customer purchases are suffering the most. The money appears to be focused on what may be seen as more defensive technology stocks, and Netflix Inc. among them shines the brightest.

If there’s any consolation to be had, it’s that investors are no longer worried about the fortunes of Twitter Inc. This is Elon Musk’s problem now.

More from other writers at Bloomberg Opinion:

• The Chips Act won’t work without the whole Chip: Thomas Black

• Money-Losing Airbnb Hosts Three Options: Teresa Ghilarducci

• Tech Investors Overreact Like They’re Clamful at a Cloud: Tim Culpan

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Tim Culpan is a Bloomberg Opinion technology columnist in Asia. He was previously a technology reporter for Bloomberg News.

More stories like this are available at flowerberg.com/opinion

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