Tech’s Biggest Companies Discover Austerity, to the Relief of Investors

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“You don’t need much good news for the stocks to outperform,” Mr. Mahaney said.

But shares of several of those companies dropped in after-hours trading on Thursday evening after they reported disappointing results for the most recent quarter, making it clear that tech’s business challenges remain.

On Thursday, Google reported its second decline in advertising, ever. Amazon said that its lucrative cloud computing business had slowed and that sales in its core e-commerce business had declined. And Apple posted its biggest decline in Christmas season iPhone sales since 2018.

On Wednesday, Meta reported that its sales in the final three months of last year had fallen 4 percent. Last week, Microsoft said spending on cloud computing was weakening.

The market’s reaction to lackluster tech earnings could be an indication of what is to come for the broader economy. Economists are trying to assess whether the economy can avoid a deep recession and achieve what some are calling a soft landing. If tech, as the most prominent industry to weaken last year, finds a bottom and begins to rebound, it would be an illustration of the relative strength of the broader economy, said Jason Furman, a Harvard economist.

“Six months ago, the economy was contracting and interest rates were rising, and there was a rebalance away from the pandemic,” Mr. Furman said. “That perfect storm,” he added, “isn’t true any more.”

Alphabet, Amazon and Apple all reported quarterly results that largely fell short of Wall Street expectations on Thursday. Alphabet posted its fourth consecutive decline in profit as it grappled with a slowdown in digital advertising. Advertising sales at YouTube, Google’s video platform, dipped nearly 8 percent to $7.96 billion, below the $8.2 billion expected by analysts.

As Google’s sales slow, Mr. Pichai said, the company is making various efforts to tame expenses. They include improving the financial performance of its phones and other gadgets, trying to make its cloud division profitable and strengthening YouTube’s business.