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Do you want to know technology profits in the near future?

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During the past months, technology companies have laid off workers, suspended hiring and some measures to reduce costs, technology companies may provide a detail about the bad things in their business soon.

Snapchat, which hurt much of the tech sector this coming May with a warning of a deteriorating economy, is set to report third-quarter earnings on Thursday. Apple, Amazon, Facebook-parent Meta, Microsoft, Twitter (TWTR), and Google’s Alphabet (GOOGL) will report earnings results the following week.

“People probably should be bracing themselves for these results,” that what Scott Kessler said, technology global sector lead at research firm Third Bridge Group.

Tech giants have grown increasingly large and prosperous despite recent economic turmoil. Since the start of the 21st century, they’ve seen little to no effect on their success from global conflicts, financial panics or disease outbreaks. This even held true during a pandemic when many of these same companies continued to prosper.

Due to inflation, consumers can no longer purchase tech products and services at will. They instead must pay more for these items, making them less accessible. Also reducing demand is the high cost of online advertising and enterprise tech services in light of recession fears and supply chain problems. Other causes of stunted growth include higher interest rates, snarled supply chains and other macroeconomic issues.

A $100 increase in the US dollar value equals a significant drop in the value of sales made overseas. This is because senior industry analyst Angelo Zino points out that the increased value of the dollar hurts sales made outside the United States. Most tech companies’ revenue comes from sales made outside America, so this can significantly reduce their affordability. Additionally, it may make hardware products produced by companies like Apple more expensive for foreign consumers. This is because most of these companies are generating more than half their revenue outside America.

Analysts predict that most major tech companies will report slow or declining revenue and profit growth for the three months ending in September. This shift in expectations was particularly striking because it occurred during the same time frame as previous years.

The projections for Google, Amazon, and Snap all show a decrease in revenue compared to the previous year. This includes Meta, which is expected to see a 5% decrease in quarterly revenue. Both Amazon and Google are expected to have flat sales for the year; this is projected to be the best shape for both companies.

Many tech companies showed signs of financial decline in the previous quarter. Meta’s revenue decreased for the first time since they IPOed in 2012. This was partially due to a decrease in demand for online advertising, which is their main business. Twitter, Apple, Google, Snap and Microsoft all reported decreased ad revenue for their June quarter.

“We compare investor negative sentiment on tech today to what we have seen only 2 other times in our decades of covering tech stocks: 2008 and 2001,” Wedbush analyst Dan Ives said in a note to investors this week, referring to two prior recessionary periods.

Tech companies’ ongoing issues will continue to drive interest in any guidance they provide for 2022. This is because these problems won’t end anytime soon.

Investors want to know the answers to a wide variety of questions regarding the upcoming holiday season. Specifically, they want to know whether the online advertising market has stabilized before the most important three-month period of this year. They also want to learn just how significant this period is for these companies.

Tech companies may feel pressured to improve their core operations instead of pursuing risky bets that can turn out poorly. This has already started to happen.

Google announced its closure of Stadia, Amazon announced the removal of its home delivery robot and Meta stopped producing its newsletter product. These recent events involved the three companies mentioned.

With mounting competition and a lack of public support, Meta may be in an unenviable position. Their October 2017 rebranding to Meta prompted a deliberate push toward the development of the metaverse, a future internet with long-term goals that aren’t expected to be fully realized for years, if ever. But the Wall Street Journal reported last month that the company was downsizing — some analysts anticipate even more layoffs to come.

“I do think you’ll see them announce cost cuts. I think they’ll reduce the workforce,” Zino said. “Meta is really boxed in a corner here. Their core business is in an environment where they’re not going to see much growth at all … and they don’t have any major revenue center outside of advertising.”

What a difference a year makes.

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