Big tech trims its sails as it braces for a choppier second quarter

Despite widespread investor concerns about how Big Tech earnings would fare in the first three months of 2022, most of the results were surprisingly solid.

and Russia’s invasion of Ukraine, said Jim Tierney, chief investment officer for US growth at AllianceBernstein. Meta’s Sheryl Sandberg said global regulatory risks are “a real challenge for our industry” as “the rules that are governing the internet are being rethought and rewritten”. Three months ago, the iPhone maker’s finance chief Luca Maestri said supply chain issues were being resolved and forecast record revenue for the March quarter. He was right about the record – total revenues increased 9 per cent to $US97 billion – but renewed lockdowns in China and other constraints could cause headwinds of between $US4 billion and $US8 billion this quarter, Maestri told investors.“No one is immune from supply chain disruption,” said Paolo Pescatore, an analyst at PP Foresight.

Satya Nadella, chief executive of Microsoft, offered the most confident assessment among the Big Tech giants. The company’s cloud business grew 46 per cent, and he offered an outlook so positive one analyst said it would be “heard around the world”. He estimated tech spending is, as a percentage of GDP, “going to double” by the end of the decade.

Finance chief Brian Olsavsky estimated “incremental costs” of $US6 billion in the quarter. “Approximately two-thirds of these costs are within our control,” he said, “and with demand normalising, we remain focused on right-sizing our cost structure and driving out any cost inefficiencies.”

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