“You don’t need a lot of good news for stocks to outperform,” Mr. Mahaney said.
But shares of several of those companies fell in after-hours trading Thursday night after reporting disappointing results for the most recent quarter, highlighting that the tech industry’s business challenges remain.
On Thursday, Google reported its second advertising decline ever. Amazon said that its lucrative cloud computing business had slowed and that sales in its core e-commerce business had declined. And Apple saw its biggest decline in the Christmas business iPhone sales since 2018.
Earlier in the day, Meta reported that its sales were down 4 percent over the last three months of last year. Last week Microsoft said spending on cloud computing had softened.
The market’s reaction to lackluster tech earnings could be an indication of what’s to come for the broader economy. Economists are trying to gauge whether the economy can avoid a deep recession and achieve what some are calling a soft landing. If technology, the most prominent industry to weaken over the past year, finds a bottom and begins to recover, it would be an example of the relative strength of the overall economy, said Jason Furman, a Harvard economist.
“Six months ago the economy was contracting and interest rates were rising and there was a rebalancing away from the pandemic,” Mr Furman said. “That perfect storm,” he added, “isn’t true anymore.”
Alphabet, Amazon and Apple all reported quarterly results that largely fell short of Wall Street’s expectations on Thursday. Alphabet posted its fourth straight profit decline as it struggled with a slowdown in digital advertising. Ad revenue on YouTube, Google’s video platform, fell almost 8 percent to $7.96 billion, below the $8.2 billion expected by analysts.
As Google’s sales slow, Pichai-san said, the company is making various efforts to curb spending. These include improving the financial performance of its phones and other devices, trying to make its cloud division profitable, and boosting YouTube’s business.
