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Tech’s Biggest Firms Discover Austerity, to the Relief of Investors


“You don’t need much excellent news for the stocks to outperform,” Mr. Mahaney said.

But shares of several of those corporations dropped in after-hours trading on Thursday evening after they reported disappointing results for essentially the most recent quarter, making it clear that tech’s business challenges remain.

On Thursday, Google reported its second decline in promoting, ever. Amazon said that its lucrative cloud computing business had slowed and that sales in its core e-commerce business had declined. And Apple posted its biggest decline in Christmas season iPhone sales since 2018.

On Wednesday, Meta reported that its sales in the ultimate three months of last 12 months had fallen 4 percent. Last week, Microsoft said spending on cloud computing was weakening.

The market’s response to lackluster tech earnings might be a sign of what’s to return for the broader economy. Economists try to evaluate whether the economy can avoid a deep recession and achieve what some are calling a soft landing. If tech, as essentially the most distinguished industry to weaken last 12 months, finds a bottom and begins to rebound, it will be an illustration of the relative strength of the broader economy, said Jason Furman, a Harvard economist.

“Six months ago, the economy was contracting and rates of interest were rising, and there was a rebalance away from the pandemic,” Mr. Furman said. “That perfect storm,” he added, “isn’t true any more.”

Alphabet, Amazon and Apple all reported quarterly results that largely fell wanting Wall Street expectations on Thursday. Alphabet posted its fourth consecutive decline in profit because it grappled with a slowdown in digital promoting. Promoting sales at YouTube, Google’s video platform, dipped nearly 8 percent to $7.96 billion, below the $8.2 billion expected by analysts.

As Google’s sales slow, Mr. Pichai said, the corporate is making various efforts to tame expenses. They include improving the financial performance of its phones and other gadgets, attempting to make its cloud division profitable and strengthening YouTube’s business.

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