As technology companies look forward to big opportunities in artificial intelligence, this latest earnings season seemed to reveal some cracks in their present-day armor.
“We’ve seen weakness across China and other emerging markets,” Qualcomm Inc. QCOM, -0.40% Chief Financial Officer Akash Palkhiwala said on the chip company’s earnings call in early August, according to a transcript provided by AlphaSense/Sentieo. “There is a lot of uncertainty in China with respect to…the amount of debt people are carrying [and] what kind of stimulus is going to take place,” he said. “And I think there is consumption that is waiting to happen and I hope it will open up at some point in time, but at the moment, I think things are uncertain enough that consumption is being held down.”
Chief Financial Officer Lori Koch highlighted “ongoing consumer electronics demand headwinds, notably in China” as one reason why the company trimmed its full-year earnings outlook. As tech companies see “a significant slowdown in their own rapid rates of growth,” they’re showing more caution around advertising spending, according to Mark Read, the chief executive of ad-agency WPP PLC WPP, +0.92% WPP, +1.50%.