Shulou(Shulou.com)11/24 Report--

On the evening of April 24, Beijing time, it is reported that Microsoft, Google parent companies Alphabet, Meta and Amazon will all release new quarterly results this week after massive layoffs of 70000 people. Currently, these companies are evaluating how to use artificial intelligence (AI) to drive their future growth. For investors, they are more concerned about whether the latest round of layoffs has boosted the profits of these companies.

The big four technology companies are important, with a combined market capitalization of more than $5 trillion, accounting for more than 14% of the overall market capitalization of the S & P 500.

Microsoft, Alphabet and Meta's profits will grow by an average of 4.5 per cent in the first quarter compared with the previous quarter, according to analysts surveyed by Refinitiv, a financial information service. Of these, Meta's profits will rise the most, reaching 11.8 per cent. But analysts expect the profits of the three companies to fall by an average of nearly 16 per cent compared with the same period last year. Among them, Microsoft is the best performer, falling 0.5% from the same period last year.

It is well known that the three companies, along with Amazon, made large-scale layoffs in November last year and March this year, bringing the total to about 70000. Among them, Meta has announced two rounds of major layoffs.

By contrast, Amazon's profit in the first quarter of this year is expected to increase eightfold from a month earlier, mainly because of a sharp drop in profits in the fourth quarter of last year. Profits fell in the fourth quarter of last year because of heavy losses on investments in electric car maker Rivian.

Research firm YipitData expects Amazon's North American sales to exceed Wall Street analysts' expectations in the first quarter of this year.

The companies are expected to update their AI progress on the upcoming earnings call this week. The CEO of these companies started talking about the technology on the earnings call last quarter.

"Last quarter, these big technology companies focused on efficiency and profit improvement," said Andrew Lipsman, an analyst at Insider Intelligence. "this quarter, they are likely to be more forward-looking and will discuss the huge potential of artificial intelligence."

Microsoft has integrated OpenAI's ChatGPT technology into its search engine Bing, competing more fiercely with market leader Google. Not to be outdone, Google released its own AI chat robot Bard.

AWS, Amazon's cloud division, the world's largest cloud service provider, has released a set of technologies designed to help other companies develop their own AI chat robots. Similarly, Meta has released an AI model that identifies specific objects from images.

"this is a double-edged sword because these companies are also under pressure to improve their cash flow in the face of an economic slowdown," said Thiago Kapulskis, an analyst at Itau BBA, an investment research firm.

When it comes to cloud business, analysts say the cloud businesses of Amazon, Google and Microsoft are also more stable than expected.

This year, these big technology companies have done well in the stock market. So far, Microsoft and Alphabet are both up 19%, while Amazon is up 23% and nearly 77%.

In addition, Apple shares are up 28%. Next week, Apple will release its results for the second quarter of fiscal 2023, which ends in March, about a week later than usual.

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