Last October, the tech sector was still in full upswing, though this column warned even then that the pandemic boom was fizzling out.
Forecasts for the holiday season aren’t expected to be much better — tech investors are girding for several weeks of cautionary statements, missed numbers and downright pessimism, as tech executives try to get rid of all the company baggage before next year. Those declines may seem small compared with what is expected from the biggest names on the internet — Alphabet Inc. GOOG, +0.61% GOOGL, +0.80%, Meta Platforms Inc. META, -0.93%, Twitter Inc. TWTR, +2.05% and Match Group Inc. MTCH, +3.75%. These companies comprise the interactive services segment of the communications services sector and analysts expect their third-quarter earnings to fall 20.4%, and their blended revenue to grow 6.4%.
And while Alphabet’s Google is expected to see revenue growth in the quarter, that single-digit growth rate of 9% is anticipated because of the ad climate, and competition to YouTube from TikTok. Last quarter, YouTube’s revenue growth decelerated, due to competition from TikTok and other video-streaming rivals.
“It seems end demand has likely deteriorated markedly in recent weeks, and end customers appear to be aggressively draining inventory,” wrote Stacy Rasgon, a Bernstein Research analyst in a recent note after AMD lowered its outlook.Both semiconductors and the hardware segments are spoiling the momentum in the rest of the IT sector. Estimates compiled by FactSet indicate that the semiconductor industry is forecast to see overall earnings tumble 15.
E-commerce companies are still seeing sales grow, but those slower growth rates started last year, after the end of lockdowns around the world brought consumers back into bricks-and-mortar stores. Costs for labor, transport, and goods are imploding, so earnings are falling sharply. In the consumer discretionary/internet retail sector, earnings are expected to fall 25.6%, while revenue is forecast to grow 14.7%, compared with 14.8% revenue growth in the year-ago quarter.
What goes up must come down.
What’s everyone shorting?
remindmetweets on November 22, 2022
90% of your depressing BS propaganda turns out to be false 😏
Is your job to fud and scare investors?! Marketwatch founder must be a bear shorting day in day out🖕
remindmetweets on November 2, 2022
zerohedge