Big Tech is in the spotlight this week as the four most valuable companies in the United States and Meta, report how they have fared this quarter amid the global economic turmoil. On Wednesday, Meta, the owner of Facebook and Instagram reported its first-ever revenue decline and predicted a dip in revenue for the next quarter.

The social media giant, whose social media platforms are dependent on advertising said its ad sales were hurt as businesses are cautious to spend on advertising due to economic instability since the war in Ukraine. The company also blamed softer e-commerce spending. “Engagement trends on Facebook have generally been stronger than we anticipated and strong Reels growth is continuing to drive engagement across Facebook and Instagram,” META CEO Mark Zuckerberg said on a conference call with analysts.

“That said, we seem to have entered an economic downturn that will have a broad impact on the digital advertising business. It’s always hard to predict how deep or how long these cycles will be, but I’d say that the situation seems worse than it did a quarter ago”. The social media giant is under pressure after a 50 per cent stock drop this year, meaning the company’s market cap has sunk below $500 billion (€492 billion), making the company worth less than Tesla.

Meta and other technology companies such as Google have said they will hire less given current economic conditions. Google’s parent company Alphabet and Microsoft also reported growth slowdowns on Tuesday but it isn’t all doom and gloom. Apple and Amazon wrap up the week when they release their results on Thursday.

Rising interest rates and inflation and recession fears have pounded the tech sector this year. On Tuesday, Alphabet reported weaker-than-expected earnings and revenue for the second quarter. The company said adjusted earnings per share hit $1.21 (€1.19) during the second quarter, compared to the expected $1.32 (€1.30).

Source: Euronews