Big tech: resilient despite macroeconomic headwinds

Big tech companies are not immune to the current macroeconomic slowdown. In the quarter that ended June 2022, Alphabet, Amazon, Apple, Meta and Microsoft all reported their softest results in over a year.

EIU’s latest technology outlook outlines some of the critical challenges facing big tech and details why, despite tricky external developments, we expect these companies to remain resilient.

Key findings from the report include:

• Macroeconomic conditions, especially the strong US dollar, are weighing on big tech earnings

• Meta was the worst affected, reporting its first-ever quarterly revenue decline (-1%)

• The enterprise side remains strong, with cloud services growing at over 30%; premium services and subscriptions also remain positive on the consumer side

• Big tech companies retain huge cash reserves (over half a trillion dollars combined), which will enable them to weather the storm

“The slowdown suggests that the strong growth seen as a result of the pandemic is now normalising. Although big tech companies retain strong assets, such as their market positions, sizes and cash reserves, they will have to cope with weaker demand and higher costs over the next few years.”

DEXTER THILLIEN, TECHNOLOGY LEAD, EIU

The full report, ‘Big tech: resilient despite macroeconomic headwinds’ is available to download here.

More award-winning insights on the technology sector can be found in EIU Viewpoint, our country and industry analysis service. EIU Viewpoint provides unmatched forecasts, analysis and data for nearly 200 countries and six key sectors, helping organisations identify prospective opportunities and potential risks.