After its worst year since 2008, the Nasdaq is up 15 percent through early 2023.
The last time tech stocks enjoyed such a long rally, investors braced for electric car makers, Rivian’s blockbuster IPO, the U.S. economy was completing its most vigorous year of growth after 1984, and the Nasdaq was trading at record highs.
This time, there is much less reason to celebrate. Cost-cutting replaced growth on Wall Street’s checklist, and technical managers were celebrated for efficiency over innovation. The IPO market is dead. Resignations abound. Earnings reports were the week’s story, with results from many of the world’s most valuable technology companies. But the numbers, for the largest part, needed to be more satisfactory.
Apple missed estimates for the first time since 2016, and Meta posted its third quarter of revenue declines. Google’s core advertising business shrank, while Amazon ended its weakest year of growth in its 25-year history since its shares went public.
Closing with solid gains
Although investors had mixed reactions to individual reports, all four stocks closed the week with solid gains, as did Microsoft, which reported earnings and issued vague guidance forecasting revenue growth of only about 3 percent this quarter.
“Meta” is the best of the group this week, with a sharp jump of 23 percent, the third-best week ever. In Wednesday’s earnings report, revenue came in slightly above estimates, even with year-over-year sales falling, and guidance for the first quarter was roughly in line with expectations.
Key to the rise was CEO Mark Zuckerberg’s earnings statement that 2023 would be “the year of efficiency” and his promise that they are focusing on efficency.
