The Future of Alphabet's Value is Shadowed by Poor Earnings

The days of Alphabet INC constantly reporting higher-than-expected sales and profits to its investors are over.

Quarterly updates from major US companies were disappointing, from Google parent Microsoft Corp and Texas Instruments Inc. This caused a sell-off that threatened to wipe out $380 billion in market value. The news thwarts bets that this year’s $5.5 trillion sell-off in tech stocks had bottomed out.

These quarterly updates highlighted mounting pressure on everything from digital ad spending to machine chips industrial. The Nasdaq 100 Index fell 2% as the results refocused investors’ attention on the damage to stocks. Profits and the economy due to the rapid increases in interest rates by the Federal Reserve.

Big losses

Alphabet and Microsoft lead the mega-cap erasing about $380 billion in value

According to a strategist at Saxo Capital Markets, “The global economy is at a turning point.” “The stronger dollar will continue hurting future profits for companies at a time when consumer demand is likely to fall, and it is expected

for the reverse wealth effect to take over the markets. Pressure remains on riskier asset classes such as technology.”

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After nine straight quarters beating estimates, Alphabet had only failed once since the end of 2017. But now, according to data compiled by Bloomberg, Alphabet has reported three consecutive quarters of disappointing earnings per share.

According to the data, Meta Platforms Inc. and Amazon.com Inc. have lost revenue in three of the last four quarters. Meta posts your earnings after the market closes on Wednesday, followed by Amazon and Apple Inc. on Thursday.

Signs of weakness were noticeable in Tuesday’s results. Microsoft posted its weakest quarterly sales growth in five years, strangled by the rising dollar, falling demand for PCs and falling ad revenue.

According to Anurag Rana, an Analyst at Bloomberg Intelligence. “Microsoft forecast points to a serious slowdown” “This guidance is worse than expected than we had anticipated and shows that business spending on IT is slowing at a faster pace amid mounting problems cheap,” Rana said.

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In Alphabet’s biggest economic engine, search and related businesses, sales rose less than analysts expected. They were estimated as spiralling inflation limiting the growth of digital advertising. Microsoft sank as much as 8.1%, while Alphabet decreased 8.9%.

The sell-off spread to other consumer and tech giants, with Amazon falling 4.3%. Those who get sales from advertising Online followed Alphabet lower, with Meta and Pinterest Inc. falling 4.1% and 3.4%, respectively.

The Nasdaq 100 has plunged 30% this year, on track for its worst annual performance since 2008.

The demand outlook was particularly dire in the semiconductor industry, which had been one of the hottest sectors during the pandemic. Texas Instruments, whose chips are used in everything from home appliances to missiles, saw its shares fall after its

Weak forecasts indicate that the chip crash spreads beyond computers and phones to other businesses. The actions lost 6.7%, while Analog Devices Inc., ON Semiconductor Corp. and Marvell Technology Inc. also fell.

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