Big Tech Is Getting Clobbered on Wall Street. It’s a Good Time for Them.

Apple’s chief executive Tim Cook has long held the view that Apple should continue to invest in the future amid the recession. During the Great Recession, it doubled its staff and nearly tripled its sales. Recently, it has increased bonuses to some hardware engineers by up to $ 200,000, according to Bloomberg.

John Chambers, who managed Cisco Systems through multiple recessions as its former chief executive, said companies’ strong businesses and deep pockets could give them the opportunity to take risks that would be impractical for smaller competitors. During the 2008 recession, he said, Cisco allowed aggrieved automakers to pay with credit for technology services when competitors demanded cash. The company risked writing 1 billion in inventory, but emerged from the recession as a strong provider in the healthy auto industry, he said.

“Companies break up during a recession,” Mr. Chambers said.

David Yoffey, a professor at Harvard Business School, said excel would need to ignore the darkness of the wider market. He said the previous downturn showed that even the strongest businesses were sensitive to profit pressures and were likely to pull back. “Firms become pessimistic like everyone else,” he said.

The first test for tech giants will be contagious from their peers. Amazon shares fell more than 65 percent in electric vehicle maker Revian Automotive, a લો 7.6 billion paper loss. Analysts say the slump in advertising by app developers is likely to lead to a drop in sales of Apple’s services, which rely on venture-capital funding to finance their marketing. Analysts and cloud executives said, and start-ups are examining their spending on cloud services, which could lead to slower growth for Microsoft Azure and Google Cloud.

“People are trying to figure out how to spend smartly,” said Sam Ramji, chief strategy officer at data management company Datastax.

Regulatory challenges on the horizon can also darken the prospects of large tech companies. Europe’s Digital Market Act, which is expected to become law soon, is designed to increase the openness of tech platforms. Among other things, it could reduce the estimated $ 19 billion Google collects from Apple Alphabet to make Google the default search engine on iPhones, which could wipe out 3 percent of Apple’s pretex profits, Bernstein estimates.

But companies are expected to challenge the law in court, possibly binding the law for years. The possibility of being trapped in it clings to the consensus of analysts: “Big tech will become more powerful. And what is being done about it? Nothing, “said Kramer of Mr. Arrett Research.

Jason Carayan contributed to the report.

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